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Rentals surge as sellers take houses off market

Media Release

July 3, 2008

Rentals surge nationwide as home sellers take houses off market

The number of rental residential properties available for tenancy is surging nationwide as home sellers unwilling to meet lower priced offers take their houses off the market.

First National New Zealand General Manager John Stewart said the increase was noticeable across all regions surveyed by the network.

“Many sellers are choosing to rent out their properties themselves so the real size of the increase is hard to quantify but the numbers of rentals being advertised have increased markedly.

“One of our Rotorua agents noticed available rentals on Trade Me in their city alone last month going up more than 300% from 70 to 220.”

“Major newspapers are also featuring more rental ads than usual. While winter time is traditionally a little quieter and rental numbers can increase, our agents are saying this is more significant.”

Despite the surge of availability, rent prices were not yet dropping consistently as might be expected when more were on the market, Mr Stewart said.

“Multicultural migrants – Asians, South Africans, European nationals, Zimbabweans etc – are propping up pockets of the market in some areas. For example, rents in northern suburbs Wellington seem to have risen up to 16% in the past three months, and rents in Auckland’s eastern suburbs are up about 10%.”

Rent prices in other regions appear to be mostly static, although there have been some drops in price, for example in Alexandra and surprisingly, Tauranga.

“In Christchurch our members have up to 30% more rentals on their books than 12 months ago. Prices there are static at the moment but some pressure is expected to come on as supply increases.”

The recent surge in total rental property numbers is matched by a significant increase in the number of new private landlords, Mr Stewart said.

“We are expecting some to transfer from private management to commercial property managers once they learn what it is like to be a landlord. One of our members who runs a property management company recently had a first-time landlord approach him and ask for help to get back $1400 in unpaid rent.

“Because of the increased supply, scruffier properties will be vacant longer and owners may have to spend money to make sure their rentals are up to scratch. Property investors who stretched to purchase and don’t have the money to make their property attractive to tenants may be caught out with long vacancy periods.

“While one might conjecture on the effect increased fuel prices might have on rentals further out of towns and cities, there is no evidence of a preference shift back to central locations yet.”

ENDS

About First National Real Estate

Established in New Zealand since 1985, First National has become the first stop for tens of thousands of property buyers and sellers throughout the country. From Kaitaia in the north to Riverton in the south, there are around 95 First National Real Estate sales offices and approximately 700 salespeople.

Each office is independently owned and operated, just like their counterparts in Australia, where First National Real Estate has 450 offices. First National Real Estate is a co-operative, not a franchise. While most property sales are local, our members benefit from a comprehensive referral network, not only throughout New Zealand and Australia, but also in Singapore, the United States and Canada.

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