New data is out on the rental market. Photo/Doug Sherring
New data is out on the rental market. Photo/Doug Sherring
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.
Ashley Church, Property Institute chief executive.
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.
The Healthy Homes Guarantee Bill, banning foreign buyers, extending the bright-line test from two to five years, requiring landlords to give longer notice, ring-fencing tax losses and stopping landlords' increasing rents more than one a year were all issues Crockers surveyed landlords on.
It found 31 per cent of landlords were aware of the bill but only 17 per cent knew of the plan to ban them from pushing up the rent more than once a year, Crockers found.
Many landlords - 44 per cent - think property prices will decline in the next year, it said.
"The majority of investors (61 per cent) claimed that they'd increase rents to some extent, although this is lower than in June (68 per cent)," Crockers found.
"The proportion of those who didn't know whether they'd increase rent rose to 19 per cent, up 12 points from June. There was a slight decline in the proportion not planning to increase rents – down 5 points to 20 per cent in October. This suggests a greater uncertainty among property investors, where more investors have adopted a 'wait and see' approach to rent increases in the wake of the new government's housing policy announcements and plans to reduce net migration," Crockers found.
Last month, Barfoot & Thompson said Auckland residential rents were rising as landlords faced increasing costs.
Kiri Barfoot, a director of agency and management business which manages more than 14,500 Auckland rental properties, said rents rose nearly 5 per cent throughout the city in the latest quarter, and by 6.2 per cent in the central suburbs.
