Supply up, demand down for rentals

Friday, 30 August 2024

Homes in Christchurch are taking longer to rent, and fewer tenants are hunting for properties as the rental market changes course.

According to the Government’s bond data, rents in the city are flat and the number of new tenancies is at its lowest since August 2021. A year ago, renters were lining up to get a chance at securing a tenancy.

Nigel Barker, a full-time landlord and president of the Canterbury Property Investors Association, has a property vacant and said leasing is a struggle.

“It’s dead at the moment.

“I have a lot of tenants buying homes at the moment, which is a good thing and perhaps leading to the current turnover of properties. I've had five tenants buy their first house in the past three months”

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A total of 963 bonds were lodged in June, the first time in nearly three years that fewer than 1000 homes have rented in the city, and down from a peak of 2031 in February 2021.

David Hopkins, director of Rent Right in Christchurch, said the market has “certainly slowed down” since the same time last year.

“We were seeing 30 people at open homes then, now we are seeing maybe four to 10. It it’s anything more than 10, we’re talking about it back at the office.”

Homes on the books were taking “a couple of weeks longer” to rent on average, and landlords had to be realistic about rents, Hopkins said.

“It’s just the cost of living, with power bills and so on really eating up people’s budgets.”

He said the number of new arrivals to the city had dropped.

Outer areas such as Halswell, Lincoln, Ravenswood and Kaiapoi offered good value and were popular with tenants, he said.

Landlord Clare Matai has been struggling to tenant her two-bedroom property in Merivale after advertising it for several weeks.

“It’s the first time ever I’ve had almost no inquiries, it’s highly unusual,” she said.

“It’s a desirable property. It’s never, ever been vacant.”

Matai said at $675 a week she considered the rent was fair, but would look at whether it was “priced correctly” if she did not secure a tenant.

Tom Greene, business development manager at Opes Property Management, said landlords were “feeling out the market”.

“It’s quieter than we’ve seen in previous years, and there’s an increase in the supply of rental properties.

“Rentals (prices) have remained fairly flat this year, but they’re not dropping.”

According to Trade Me Property, Christchurch remains the most affordable of the main centres for renting a home.

Canterbury’s average asking rent on the site for July was $580, up 1% from $570 at the end of last year.

Government bond figures show Christchurch city rents have sat mostly flat this year. They averaged $550 a month in June, the same as six months earlier after rising from $520 at the start of 2023.

Trade Me Property said the number of rental listings on its site nationally was the highest since it started recording the data in 2019, and there were 46% more homes available than the same time last year.

Canterbury had 2702 rentals listed on the site in July, 20% more than in June and 31% more than a year ago.

Gavin Lloyd, property sales director at Trade Me, described the rental market as “a tale of two motu”, with rents higher in the north and cheaper in the south.

Trade Me’s average asking rent in Canterbury during July was $580, up from $575 earlier in the year.

Average asking rents on the site were $680 in Auckland, $650 in Wellington and $620 in Otago.