Rents Rise As Demand Soars

Rents Rise As Demand Soars

Rents for Christchurch residential properties have increased significantly in the last five years, Alison Woods who runs The Rent Shop for Christchurch property company, Simes Ltd, says.

Figures sourced from the Tenancy Service Bond Centre, based on bonds lodged, show that the median rent for a three-bedroom home in Riccarton increased from $200 a week in 1999 to $260 a week late last year. In Fendalton-Merivale the price increased from a median of $237 to $280, St Albans-Shirley from $200 to $250 and Christchurch Central from $210 to $300.

The increases relate directly to supply and demand for properties to rent in the city, Mrs Woods says. Her research shows that rent levels track the fortunes of the property market. When the market eased in 2001, the median rent for a three-bedroom house in some areas including Fendalton-Merivale and Riccarton, dipped.

Mrs Woods says that over the last two years rents have lifted in line with the market recovery. "Current rents reflect the buoyant property market. Although landlords are paying more for their properties, they remain confident about investing in residential property."

Simes Director Dave Sutton says property appeals as an investment because it is secure, tangible and has a proven track record for gain. "The middle of the market has consistently shown potential for good returns. This is where a shortage of properties available to rent is showing up now because the lift in property prices has affected the ability of some investors to buy in.''

Location remains a key for property investors, Mr Sutton says. Factors such as school zones and proximity to the workplace are important influences in a tenant's decision to rent.

Mrs Woods has noticed that tenants are being very specific about their property choice. Even students faced with a desperate shortage of available accommodation remain focused on properties that fit their needs and budgets.

A factor in the market is that fewer student flats are available this year. Many students aware of the traditional shortage of rental accommodation in the New Year extended their leases before the annual summer holiday period, she says.

And although rents have increased, Mrs Woods says landlords need to be realistic in their rent demands. "We are finding a consumer resistance to paying rents of more than $350 a week,'' she says. "At the end of the day rents for an average family home need to be affordable and related to disposable incomes.''

© Scoop Media