A real estate boss says recent weather events has seen people reconsidering where they live. Photo / Dean Purcell
A real estate boss says recent weather events has seen people reconsidering where they live. Photo / Dean Purcell
A chronic shortage of residential rental stock in Auckland has left some desperate prospective tenants resorting to bribes, a real estate boss says.
Data from Impression Real Estate - which manages over 1000 rentals in the Auckland region - shows the number of new tenants viewing each rental property hasincreased 900 per cent, or an average of five per property to over 50, in just six months.
An increase in migration, Auckland’s summer flooding events and domestic pressures are all contributing to the rental squeeze.
Rishabh Kapoor, chief executive of Impression Real Estate, said it was concerning to see desperate tenants offering bribes to property managers to secure a rental ahead of others.
“While the majority have been monetary-related, such as offering to pay anywhere between $50-$100 more than the advertised rent, some have been about dinners and gifts to the property managers to get their application approved over other applicants.
Kapoor said one of his senior property managers told him a $200 bribe was offered to him during a viewing he was conducting yesterday.
“An interesting fact is most of these applicants are coming from overseas,” Kapoor said.
“Being a migrant myself, I have seen the same culture back in India where people would offer more rent to secure a property where there is competition. It gives our team a good opportunity to educate these people about our culture in New Zealand and most of these people are pleasantly surprised by it.”
Kapoor said around this time last year they were seeing a vacancy rate for apartments of about 7-8 per cent.
This was as low as 2.5 per cent at the moment, he said.
Kapoor said there was high demand for CBD apartments coming from those who have lost their homes as a result of storms earlier in the year, along with recent migrants.
He said the company urgently needs another 120-plus homes or apartments to meet market demand.
“What we have noticed is that after the recent weather events our clients have decided they no longer want to reside in properties that have large sections or are adjacent to hillsides and could be vulnerable to slips or flooding, so they are moving into the CBD - which is putting even more pressure on an already tight apartment rental market,” Kapoor said.
“We are also seeing others downsize from larger family homes because they can’t afford to pay the mortgage with current interest rates and are selling up and wanting a rental property to live in.
“In addition to this new domestic pressure we have migrants coming in who are also wanting to live in the central city,” he said.
But with this comes an increased number of people who are new to renting and unfamiliar with current industry regulations, Kapoor said.
He said more needs to be done to better inform and educate landlords and new tenants who are often unaware of their legal rights and responsibilities under the Residential Tenancies Act.
This included things like repairs and maintenance, rent increases, inspections, bonds and healthy homes.
“One of the biggest issues we are seeing is the misunderstanding about the maintenance and repair responsibilities. Some tenants are unaware that they need to report maintenance issues as soon as they arise, while some landlords mistakenly believe that the tenant is responsible for all repairs or maintenance tasks,” Kapoor said.
Figures from Stats NZ show migrant arrivals continued to soar in the year to June 2023.
Annual net migration rose to 86,800 - made up of a net gain of 121,600 non-New Zealand citizens and a net migration loss of 34,800 New Zealand citizens.
But on a monthly basis the migration gain for June of 5000 was lower than previous months and well off the big gains of over 13,000 seen in February and March.
Meanwhile, Auckland rents rose nearly 3 per cent in the year to June to an average of $605 a week.
An increase in migrants and fears of slips and flooding is driving high demand for CBD apartments in Auckland. Photo / Michael Craig
Can AI help?
Impression Real Estate has developed artificial technology (AI) designed to help tenants find new properties and educate them, and landlords, on their rights, a first for the local industry, it says.
The technology uses a chatbot as an interface for tenants and landlords which is currently being trained to answer a wide range of questions and is available at any time of the day.
“The bot has been named Marcia after one of Impression Real Estate’s team members. For the past 15 years, Marcia has answered numerous inquiries and we wanted to be able to share her expertise in the form of a virtual avatar with our clients,” Kapoor said.
“The new AI chatbot will be able to answer common queries such as how to receive a bond refund, where they can find a copy of their lease agreement, or how to locate a plumber for a water pressure issue.
“As well as providing practical solutions and driving greater efficiency, over time, it will learn to assist with the legal fundamentals of the tenancy and help tenants and landlords to adhere to their legal obligations in a very transparent way.”
He said there was significant scope to introduce other new technology to support the tenancy process including virtual viewings of properties.
However, this was not well supported by current Government policy.
“We know there is demand from tenants, particularly those moving here from overseas to be able to conduct a remote viewing of a new property, however, current regulations would need to be updated to accommodate this,” he said.
“This would mean a prospective tenant could view a property from offshore and be able to lease the dwelling before they arrived. There would be a grace period included in case anything needed to be addressed when they inspected it in person.”
Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sport.
