Rental stock volumes have fallen sharply. Photo/Doug Sherring
Residential rental stock volumes have halved in the past year and demand from tenants is outstripping supply with predictions that people will find it increasingly hard to find a place, according to Trade Me Property.
In Auckland, rental stock volumes have plummeted by 35 per cent since last October and prices are rising.
Trade Me Property head Nigel Jeffries said Kiwi tenants were finding competition stiff: "If this trend continues, things are going to be very tough for a huge number of renters, particularly students, who will be hunting flats in summer.
"The number of available rentals in the Super City dropped 35 per cent on last October and we are beginning to see the effect on prices," he said.
The median weekly Auckland rent rose 2.9 per cent in the past year to $525/week in October.
"Rents in Auckland have remained relatively steady for two years, holding around the $500 to $530 mark, but if this shortage of rental properties continues we can expect to see new record rental prices," Jeffries said.
Christchurch has 59 per cent fewer rentals last month compared to October last year. The median rent fell 1.3 per cent annually to $395/week.
Trade Me did not cite any specific reasons for the big volume drops. But short-term holiday-style rentals such as Airbnb and fewer landlords buying investment properties due to new tax regulations are thought by others to have pushed rental stock numbers down.
Andrew King, NZ Property Investors Federation executive officer, questioned whether the drop was reflective of fewer Trade Me ads for properties for rent.
"It does seem high," he said of the new data. "Trade Me put their prices up a year or two ago."
A plan to ban landlords from passing on property letting fees to tenants could be another reason for fewer ads, he said, although that plan is yet to come into force, King said. But that could also mean landlords might not be using Trade Me as much. But tenants could just be staying put, freeing up fewer places, he said.
"It could be that people are just hunkering down and not moving," King said, adding that over-crowding in rental properties had been increasing in the last few years as people tried to save costs.
Trade Me said Wellington rental stock available plummeted 69 per cent and Jeffries said this was the most extreme: "Wellington appears to be worst hit by this rental pinch, which is worrying news for those flat-hunting."
Yet the city's median weekly rent was unchanged for the eighth consecutive month at $450/month. January was typically the busiest month as students returned and Jeffries predicted January in 2018 might be hard for tenants.
Last month, Barfoot & Thompson released rental data for Auckland which showed residential rents rising as landlords face increasing costs.
Kiri Barfoot, a director of the agency and management business managing more than 14,500 Auckland rental properties, said rents rose nearly 5 per cent throughout the city in the latest quarter, and by 6.2 per cent in the central suburbs.
"We are just coming out of winter, which is a maintenance-heavy period for rental properties - add to that uncertainty around rates increases, increased insurance costs due to the Fire Service levy and the incoming Earthquake Commission levy, compliance costs for smoke alarms and insulation, and you can understand the context of rent increases," she said at the end of October.
"Many owners will be relieved at recent forecasts indicating that interest rates are likely to remain flat in the near future."
Third-quarter figures from July to September showed the average Auckland weekly rent was up 4.7 per cent to $542, from $520 during the same period in 2016.