'Perfect storm' of rent rises to hit market, Property Institute says
New data is out on the rental market.
Rents may rise up to 26 per cent as property shortages hit the market.
Property Institute chief executive Ashley Church said research pointed to rent rises of up to 26.8 per cent in Christchurch in the past year and other big jumps elsewhere.
The new Government’s plans for the rental market, loan restrictions and historically high immigration levels had created a “perfect storm”, which he said would cause further rent rises.
“It’s all leading to a perfect storm of circumstances and means that we’re in for big rent increases in some parts of the country over the next couple of years,” Church predicted.
The Property Institute/Valocity Regional Insights Report showed a 26.8 per cent annual average rent rise on a five-plus bedroom Christchurch house from $725 a week last year to $917 a week in the third quarter of this year.
Three to four-bedroom Dunedin house rents rose an average 13.2 per cent, from $395 a week last year to $447 a week this year, Church said the research showed.
Average rents on one to two-bedroom homes in Hamilton rose 9.2 per cent, from $316 a week to $354 a week, he said.
The rises were caused by a growing shortage of properties, he said. Demand from tenants was outstripping supply and he noted claims of a fall in rental stock by as much as 35 per cent in Auckland since last October.
Auckland rental property management business Crockers also released information this week showing how gloomy landlords had become since the election of the new Government.
“In the wake of recent housing policy announcements by the new Labour Government, we gauged the mood of property investors. The proportion of investors who are negative about these new policies (34 per cent) outnumbers those positive (27 per cent) and 44 per cent expect residential property prices to decline in the next 12 months, up 10 points from June,” Crockers said.
