Not enough rentals available: Survey

There aren’t enough houses being built to satisfy rental demand, says First National.

Wednesday, July 4th 2012, 12:00AM

by Susan Edmunds

The results of its latest quarterly property management survey have been released and show rents are rising and tenants are struggling to find anywhere to live.

General manager Colleen Milne said too few houses were being built and investment by property developers was subdued.

“Some of the contributing factors to the shortage are the cost of new buildings and the costs of consents due to stringent council requirements because of the leaky home issue,” she said.

“Rent prices continue to increase across the country, particularly in Auckland and Christchurch. The lack of affordability for first-home buyers with families may result in many families being unable to climb out of the rental cycle into home ownership.”

Milne said it was now the norm to have multiple applications for vacant rental properties.

Tenants were also less picky about where they would live, choosing to rent in more affordable locations and spending more time commuting to work.

Milne said: “The areas of the country where rents are still affordable often reflect limited work opportunities.”

Cromwell had an over-supply of properties of all types.

Milne said investors had been noticeably put off by the changes to the depreciation rles but there had been a surge of landlords re-entering the market, especially in Auckland and Christchurch.

First National’s quarterly survey measures property management vacancy rates, rent rate movement and demand/supply experienced by property managers in the firm’s network, which operates nationwide.

Nationally, 42% of First National property management offices said rents had increased from a year ago.

The most expensive region to rent in is Auckland where the average rate for a studio is $225 per week, two-bedroom flats cost $300, houses are $346, three-bedroom flats $370, houses are $402, and four-bedroom houses fetch on average $468.

Taranaki has the lowest average rent for three-bedroom houses at $266 per week, while the central North Island has two-bedroom houses at $215.

The lowest rates for studio, two-bedroom flats and four-bedroom properties are in Southland, where a studio is an average of $110 per week, a two-bedroom flat costs $210 on average per week and a four-bedroom place rents for $285 on average.

According to the survey, 44% of First National respondents record two-bedroom rent rates the same as the middle of last year, while 47% of those surveyed say three-bedroom rent rates are up.

With regards to four-bedroom places, 42% of First National property management offices say rent rates are up compared with June last year.

The places with the lowest vacancy rates in the North Island were Cambridge, Te Awamutu, Papakura, and New Plymouth.

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