Demand for rental property in Auckland is at crisis point, with some houses now attracting as many as 200 would-be tenants.
Desperate tenants are often having to spend months searching for a place to live, and some even engage in bidding wars. Landlords are sitting pretty.
Rental agents say they are receiving hundreds of inquiries for listings, especially for stand-alone houses close to Auckland's central business district.
An agent who listed a four-bedroom property in Balmoral said he received 200 inquiries on the property before letting it out last weekend.
A property in Ethel St, Kingsland, attracted more than 200 would-be renters during a half-hour open-home.
"It's going to be very easy to rent it. Narrowing down the list of tenants is going to be the hard part, to be honest," landlord Dave Smith told TV3.
Rental agent Darryl Goode said in the current market, it was not uncommon for hundreds of people to register their interest in a property.
"Give me another 10 or 20 three-bedroom houses and I could let them all out in a couple of days."
Mr Goode said there was a "severe shortage" of stand-alone houses to let in the city-fringe areas, and the market was the tightest he had seen in his 12 years in the industry.
Real estate agency Crockers recently reported that the average weekly rent for a three-bedroom home in central Auckland was $580 in December, up 16 per cent in a year. For Takapuna/Milford it was $670 (up 26 per cent) and Remuera $690 (up 25).
The Herald on Sunday has reported that Auckland rental property listings on Trade Me in January were down 24 per cent on the same month last year.
Demand was also outstripping supply in Northland, Bay of Plenty and Canterbury, although nowhere near as badly as in Auckland.
Agents say the economic slowdown is the main contributor to the rental market being at crisis point.
More rental properties are being sold by investor landlords who want to cash up, and hard times are forcing homeowners to also sell and become renters themselves.
Landlord Lourdes Sudianto said he had to sell his two central Auckland rental properties after his trading business was hit by the global recession.
The slowdown has also forced many landlords to return from overseas to re-occupy their properties.
Harcourts rental manager Lesley Whiting said her Browns Bay office recently lost to returning landlords about 10 of the 300 properties it was managing, and was currently listing only two rental dwellings.
"It's got nothing to do with landlords wanting to capitalise from the World Cup, but the economic crisis which is forcing more people to come home and stay home," Ms Whiting said. "Who knows how long this is going to last, but it's really reaching crisis point for people looking to rent today."
Last year, net migration of 16,500 was the highest since 2003, driven mainly by fewer Kiwis heading to Australia to work.
"The economic recession has had a significant impact on the number of New Zealanders leaving for Australia, with a 27 per cent decrease in trans-Tasman departures over the last 12 months," Immigration New Zealand said in its latest migration trends and outlook report.
Changes to tax laws last year, which restrict investors on what they can claim in depreciation, have deterred people from investing in rental properties, says the Property Investors Federation.
Vice-president Andrew King said costs were also rising faster than capital gains, and rental returns were not matching up with mortgage rates, leaving many would-be investors feeling "it's not a good time to buy".
A lack of new houses being built also meant supply was not keeping up with demand fuelled by population growth.
"It's usually a seasonal thing, but the big drop in supply of rental homes in Auckland this year is somewhat unprecedented," Mr King said.
"The situation is more pronounced in Auckland, felt more at this time of the year because it's when people relocate, decide to move houses, and international students start coming back," he said.
Mr King said the situation could change if rising rents resulted in better yields for landlords, and more people started investing in rental properties again.
"It will help to meet the demand, but I do not see rents going anywhere but up."
What's causing the crisis?
*More investment homes are being sold by owners wanting to cash up.
*Hard times are forcing homeowners to sell and join the rental market.
*More overseas-based landlords are returning home.
*Changes to tax laws.
* Fewer houses being built.