Housing Rental Demand Stays Strong

18 January 2012


There is good news for landlords across much of the country with rental demand from tenants up 13% on a year ago, according to the latest analysis of Trade Me Property’s house rental listings in the three months from October to December.

Head of Trade Me Property, Brendon Skipper, said the trend of strong tenant demand had continued. “In the September quarter, we saw the number of enquiries from tenants was up 10% on 2010. This quarter it’s up to 13% with Christchurch and three corners of the Auckland super city driving the growth.”

In the Auckland region, demand from prospective tenants increased significantly in Manukau (+25%), Waitakere (+20%) and North Shore (+19%), while the central city (+9%) lagged the national average.

The Christchurch picture

Mr Skipper said some Christchurch landlords had experienced “extraordinarily high” levels of enquiry. “The shortage of quality properties in the areas least affected by the quakes is underpinning this activity. There’s been a dip of 32% in the number of properties listed compared to the same period last year, so it’s no surprise to see demand is up a massive 45%.”

With demand outstripping supply, average rents in Christchurch had risen 10%, well ahead of the national average of 3%, but still “on par” with central Auckland’s 9% rise.

Bucketheads and scarfies

On the supply side, the number of total listings across the country was down 6%, with all major metropolitan regions experiencing a decline in numbers except the “studentvilles” of Palmerston North (+8%) and Dunedin (+28%). New listings increased 3% on last year, but the average listing duration decreased. “As demand heats up, available houses are being filled quicker – that’s consistent with the strong demand we’re seeing”

“Landlords in these cities will be eagerly awaiting the return of the Otago and Massey students in the coming weeks – and students look set to have plenty of flat options to choose from as they get organised for the first semester of 2012.”

Behind Christchurch (-32%), the biggest declines in listing numbers came in Wellington (-20%) and on Auckland’s North Shore (-14%).

Snapshot: the 2011 year in rentals

Across 2011, the number of rental properties listed was up marginally (2%) compared to 2010. Nationally, the average rent being asked by landlords increased by 3% over the year, and the number of enquiries fielded by landlords from prospective tenants was up 7%.

Mr Skipper said 2012 was shaping up as an interesting year for the rental market. “The past year has been home to momentous events including the devastation in Christchurch, and then more recently the Rugby World Cup. Both affected the rental market in significant ways, and in the case of Christchurch will continue to do so the foreseeable future.

“If demand remains at its current levels, the flow-on impact is likely to be bad news for tenants, as landlords will be able to capitalise on strong demand for their properties with increased rents.”

He said landlords with well-presented properties would always attract good quality tenants. “With over 13,000 rental listings onsite at the moment there’s plenty of choice for tenants, but the tidiest and best priced properties will always be snatched up quickly.”

Rentals: Quarterly comparison for Q4 excluding apartments

ENDS

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