Auckland rental shortage under debate

Monday 8 March 2010

Rents look set to rise in Auckland as the rental pool drains somewhat, but the extent and reasons behind the drop are under debate.

By Maddy Milicich

Bobergs First National principal Wayne Boberg believes landlords are continuing to downsize their portfolios, accelerated by the government's latest tax proposals and will be fuelled by a shortage of building consents, rising unemployment and increasing immigration.

"Since the government first raised the issue of property tax changes in August last year, there has been an increase in the exodus of landlords from the rental market, mainly landlords who have been in the market for a long time," he says.

Figures from Trade Me show available listings for rentals as 1,800 for Auckland in February, compared to 2,441 in January and 2,501 in February last year.

"The number of rentals available is shrinking and with building consents down, it seems there's nothing to replace them," Boberg said.

However, Helen Hodgson, rental manager coordinator at Barfoot & Thompson believes things are not as bad as Boberg is making out.

"Certainly there's a big shortage of listings, but it's not unusual for this time of year," she says.

Barfoot & Thompson's average weekly rent has gone up 2.5%, currently at $390 for February compared to $380 the same time last year, while the number of listings is down 10%.

Hodgson says another reason for shortages are ex-pats returning home from overseas and giving notice they want their property back and therefore pulling them out of the rental pool.

"The shortage is not entirely investors putting properties back onto the market."

Another reason for the lower number of rentals, she says, are that a lot of tenants in managed properties are staying put, meaning there is less turnover.

"I always see rental business as transient, but I don't think we're heading for a crisis.

"[But] we'd all love some more listings, that's for sure."

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