People are less keen to become landlords and landlords are more wary of selling because of falling house prices, a survey suggests.

A year ago, one in four people intended to buy rental housing, but now one in seven has this goal.

The Nielsen online survey for found the appetite for rental housing had dropped in the past 12 months.

The survey also showed a 42 per cent fall in the intention of landlords to sell.

An online website yesterday listed 15,997 Auckland properties for sale and 4190 houses and flats in Auckland available to rent.

NZIER economist Shamubeel Eaqub said the housing market was extremely depressed and low sales volumes suggested a sombre outlook.

"Housing as an investment is less alluring than in recent years," he said.

"House prices have been largely flat for two years, compared to prices increasing by an average of 8 per cent annually in the previous decade. In this period rental properties made good investments despite very low rental yields.

"House prices are now very expensive relative to incomes. Affordability for owner-occupiers is poor ... We do not expect a great flood of owner-occupier buyers to enter the market unless prices fall.

"For investors ... current rents do not stack up. Either rents have to go up or house prices have to fall," he said. "We do not believe there is much room for significant rental increases. Instead, frothy house prices may adjust lower."

Greg Towers, a specialist property lawyer and partner at Simpson Grierson, said the figures confirmed a decline in the number of deals by traditional property investors.

"This is unlikely to change until there is uplift in the general economy and a greater degree of confidence shown in the property market by all parties," he said.

"There is now a very clear intention among investors who own property to hold rather than sell, which is a clear indicator of why the property market in general has slowed significantly."

Barfoot & Thompson's rental statistics showed a rise in the past month. Rents are rising in Auckland as landlords try to recoup higher costs, the real estate agency says.

Its average weekly rent reached a new high, rising by $5 to $408 last month. This is $20 a week higher than for July last year, which at $388 was the 2008/09 average.


* More than 1 million people rent.
* NZ has 1,651,452 houses.
* They are worth $500 billion-plus.
* 550,000 houses are rented.
* 69,000 are rented out by Housing NZ.
* $408/week average Auckland rent.
* $388/week 2009 Auckland average.

Sources: Census 06, Real Estate Institute, Housing NZ, Barfoot & Thompson