It's now more affordable to rent in New York than in Auckland. Hayley Hannan goes behind the headlines of a cut-throat rental market where flat-hunters offer landlords cash and even chocolates to sweeten a deal.
Within hours of posting an online ad for his Mangere Bridge home, Michael Aldwell was
inundated with phone calls, emails and texts from about 150 people. People kept calling, he says, even after he'd told them the property was taken.
"We posted the ad two weeks ago and the emails just went crazy. We had more than 1200 views on Trade Me. The ad was only open for 72 hours and we still had around 30 to 40 people contact us, saying, 'We know you've taken the ad off but can we please have it?"'
People offered extras to rent the three-bedroom, one-bathroom, 1960s' bungalow. "We had people say, 'We'll bring cash now' and dropping off references with a box of chocolates."
Trade Me property head Brendon Skipper has been told of people camping outside rental properties to be the first in line the next morning. His figures for the October-December quarter confirm increased demand for a smaller supply of flats.
They show a drop in listings for the 10 most popular suburbs, the largest a 35 per cent slump in Ellerslie. In eight suburbs email responses increased, the highest a 69 per cent rise in Blockhouse Bay. Rent increased over nine of the 10 suburbs.
Mr Skipper lists several reasons. "Property sales haven't been that flash and the real estate industry recorded one of the worst couple of months in 10 years."
Auckland is attractive for students, people returning from OE, staff moving to head office and migrants.
Michelle Jones, general manager of Crockers property management, says more people than ever are turning up to rental sites. Leasing consultants are recording up to 50 people at viewings when there used to be only half a dozen.
There is always some fluctuation at this time of year with university students returning, she says, but this year's demand is above average across all Auckland suburbs.
Some flats are holding ballots to select flatmates, says Angela Maynard, executive officer of the Auckland Tenants' Protection Association.
So why is the rental market so hot?
Ms Maynard says recent property tax changes could be causing landlords to sell up. Property investors now face tighter controls on what they can claim in depreciation.
Other sources blame the economic climate, with homeowners forced to sell and move into the rental market and overseas owners coming home - literally.
Fewer houses are being built. Statistics NZ reports consents, excluding apartments, fell 2.6 per cent in November, the fifth consecutive monthly fall.
It appears the competition is here to stay - for now, at least. Mr Skipper warns renters can expect the same levels of demand for another couple of months.
There's no place like ...
Auckland has been labelled the 12th most "severely unaffordable" housing market in a recent survey.
The seventh annual Demographia International Housing Affordability Survey looked at 325 markets across Australia, Canada, Ireland, New Zealand, UK, US and China. It classed Auckland, Tauranga, Christchurch and Wellington as "severely unaffordable", while boroughs in New York are "affordable". So what kind of rentals would you get in New York?
"Flatting in Manhattan is tough," says Sean Gillespie, a former journalist with The Aucklander who lives in the Big Apple. "A 40sq m apartment could easily cost $4000
a month and you'd still be dealing with visiting vermin and incessant street noise. However, you get legally-enforced central heating, a landlord who doesn't live in Australia and proximity to the world's most cosmopolitan city."
If you find a flat, what do you get for your money?
William Walker
- 24, graduate engineer
- Flats in Grey Lynn
- The deal Five bedrooms, 1 bathroom, additional toilet. Unfurnished. Dishwasher supplied. Off-street parking for 3-5 cars, small backyard.
- $137pw, plus $20 for gas, power, internet, water.
I've lived here for seven months. There's nine of us, including me, living in the flat.
We saw a big blackboard sign outside the flat, called the landlady, and moved in. We only had four to start with, and thought we'd try to get a couple. Then a girlfriend moved in and the rent started dropping. The rent kept dropping as more girlfriends migrated into the flat. Now there's me and four couples.
Each week I pay $137 for rent and $20 for gas, power, internet and water. Then we each usually cook one meal a night each week which is $30, but that can vary. I cover my own breakfast and lunch. It usually costs about $100 a week after a few bought lunches and weekend food.