Industry insiders told NZME crippling interest rates and low yields meant some landlordswould sell up this year amid “robust immigration” that continued to fuel market competition.
Tauranga landlord Vivienne Oborn said when she advertised her three-bedroom, two-bathroom, $730 a week Gate Pa rental on Facebook Marketplace it received more than 2224 clicks and 60 people had indicated they wanted to view it today.
She said the response was overwhelming and she turned off the notifications after a few days.
“It’s quite confronting because we’ve never been in this situation before with the housing crisis like it is. It’s been a couple of years since we held an open day.
Oborn, who had three rental properties, acknowledged “there were some really deserving families out there”.
“It can be stressful at times but there is a process … if you follow the process, the process works. You can’t afford to be emotional about who you’re putting in there. We want a guaranteed income and good people.”
Those with email addresses with words like ‘dusty crim’ or ‘b****face’ were not replied to and Oborn said she preferred to hold an open day to meet potential tenants in person.
“We’ll make our decisions based on who comes to the viewing.”
Tauranga landlord Vivienne Oborn is renting her property and has received a big response from potential tenants. Photo / Alex Cairns
In the past, she said companies had contacted her about renting one of her properties for their staff but she declined.
“We were like, no it’s a family home, we want a family in there.”
Oborn said she would not buy another investment property because the numbers did not stack up with the current interest rates.
She was contemplating selling one property instead as one mortgage was going up $300 a week.
Tauranga Rentals principal officer Dan Lusby said the most heartbreaking part of his job was turning away “desperate people” and their kids who had nowhere to live.
“It hasn’t got any better. They come in with their kids and you can see the desperation on their faces because they don’t know if they are going to be couch surfing or living in a tent somewhere.
“We are a people business but now our staff are becoming social workers.”
He said it had limited the number of people at viewings because there were lots of good applicants as demand continued to outstrip supply.
Tauranga Rentals principal officer Dan Lusby. Photo / File
The latest TradeMe figures showed the median rent in Tauranga was $695 a week in November compared to $640 the year before. In Rotorua it was $600 compared to $550 in November 2022.
Tauranga’s rental supply dropped 7 per cent year-on-year to November while it plummeted by 36 per cent in Rotorua.
Carrie Abbott from iRentProperty said it continued to see strong applicant numbers and a recently advertised property attracted more than 40 applications to view.
“We’ve noticed numerous calls from people outside Rotorua wanting to move here for family or work. There are also a lot of applicants who are trying to exit emergency housing and housing is in extremely short supply.”
At Home Property Management mobile rental property manager for Hamilton and Tauranga Gregory Young said while immigration was robust and positive it was seeing plenty of foreigners in the market.
“These immigrants are the fuel that keeps investments moving forward.”
He said a good tenant pays their rent on time consistently and looks after the property as if it were their own.
“The only way to stand out from the crowd is with your references.”
Rotorua Property Investors' Association vice president, Nick Gentle. Photo / Supplied
iFindProperty co-owner and operations manager Nick Gentle said some owners would struggle with higher interest rates and low rental yields.
However, for most people property investment was a 20-year project.
“You have to look through the rough times and focus on why you invested in the first place.
“The most important thing is to cover your costs. Investors who have bought with a strategy in mind to cover their outgoings, which a good advisor makes sure their clients do, will be fine, while those who buy or bought without a focus on the numbers may find themselves in trouble at some point.”
Rotorua Property Investors Association vice-president Luke Van Den Broek agreed it had become more difficult to maintain and fund private rental properties.
“This will increase tenants choices and rents will remain stable or possibly even reduce.”
As a landlord, it was great to be able to provide a safe, warm house to a family while “providing for our own retirement without relying on taxpayer funding in the future”.
Carmen Hall is a news director for the Bay of Plenty Times and Rotorua Daily Post, covering business and general news. She has been a Voyager Media Awards winner and a journalist for 25 years.
