Rotorua rental properties in hot demand

By Kelly Makiha, Brendan Manning

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Demand for Rotorua rental properties is surging - with not enough houses to meet tenants' demand, a property manager says.


New Trade Me property figures show Rotorua rental listings in the last quarter increased 2 per cent year-on-year, while demand jumped by 8 per cent.


The average cost of rent was unchanged.


Rotorua appears to be bucking the trend nationally. The Trade Me figures show supply is outstripping rental demand in almost all regions, bringing rents to a standstill.


Russell Hardie Real Estate property manager Donna Russell said that in November and leading up to Christmas, the company experienced its busiest month for rentals on record.


Demand was expected to drop off in December "but it just kept going".


"[While] it has been quiet, this week's booming again and inquiries have really picked up."


Ms Russell said she had had to take out radio advertisements to find more properties to meet demand from tenants.


Although some landlords were raising rents to take advantage of the demand, they had to be reasonable, she said.


"You've got to be careful when hiking your rents that you're still doing it reasonably, and you're offering a good product because otherwise [tenants] can go down the road and get the same house for $20 cheaper."


Pam Jones of Pam Jones Property Management said she had noticed there was even more demand now for three- and four-bedroom quality rental properties.


"At this time of year it is always busy with new people coming into town for school."


She said Western Heights High School zoning areas were particularly in hot demand.


"I've had a lot of inquiries for that area. Others are finding it hard, particularly if they had a dog.


"My stock is quite low at the moment and I could do with more three- and four-bedroom properties."


She said rents weren't necessarily hiking as a result but tenants were willing to pay for good quality.


Richard Evans from Rotorua Rentals said the good rentals were getting snapped up. He personally rented out five good houses on December 28 and December 29.


But he said Rotorua had an oversupply of flats and properties in less desirable areas, with Trade Me showing Rotorua had in total more than 300 properties available.


Anyone not prepared to make a snap decision on a property might miss out, he said.


"If you see something you like, sign up and get on with it."


Trade Me's quarterly figures - covering October to December last year - show the number of available listings rose 8 per cent year-on-year, led by double digit growth in Manukau, North Shore, Wellington and Hamilton.


The figures were a turnaround from the previous year, Trade Me head of property Brendon Skipper said.


The market could be the result of renters moving into home ownership amid record low interest rates and people staying put in their rentals longer, he said.


Real Estate Institute of New Zealand (REINZ) chief executive Helen O'Sullivan agreed and said the figures also reflected a time of year when many students left their flats and people were winding down, so less likely to move.


Christchurch, however, was an exception and remained at odds with the rest of the country, Mr Skipper said.


"The long-term impact of the earthquake on rental stock continues to bite, with listings down 18 per cent on a year ago.


"Good properties remain in hot demand with the average level of inquiry up 22 per cent compared to last year, and asking rents are up a massive 26 per cent."


Many landlords outside Christchurch were struggling in over-supplied rental markets, and might need to drop asking rents to lure tenants, he said.


The exception was for student-friendly properties in university towns, including Dunedin and Palmerston North, where the annual flat-hunting season was under way.


In spite of the figures, there was always demand for good-quality rentals in desirable suburbs, both Mr Skipper and Ms O'Sullivan said.


New sales figures from REINZ show the national median house price reached a new record of $389,000 in December - up almost 10 per cent year-on-year.


Strong demand also drove the number of sales to the highest level since 2007 - up 21 per cent on December 2011.


"The key drivers in 2012 were the Auckland and Canterbury/Westland regions, which together make up over half the real estate activity in New Zealand," Ms O'Sullivan said.


A key development last year was the growth of sales by auction - up by more than two-thirds compared with 2011.


By the numbers


$210,000 - Rotorua median sale price for December, 61 properties sold


$217,000 - Rotorua median sale price for November, 97 properties sold


$242,750 - Rotorua median sale price for December 2011, 68 properties sold


New national median house price record of $389,000, up 9.6 per cent on December 2011


74,000 houses sold during 2012, a 21 per cent increase on 2011 and the highest annual total since 2007


$33.95 billion - total value of residential sales for the 12 months ended December 2012 (excluding sections)


-Source: REINZ

 

- ROTORUA DAILY POST

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