Tenants rule as rental scarcity becomes thing of the past

Auckland has too many landlords and too few tenants.

Investors have clambered into housing in such numbers since the boom began in 2001 that the city's rental shortage of the past decade has been reversed.

Barfoot & Thompson, which manages a large portfolio of houses and flats for landlords, has noticed Auckland rents dropping consistently this year. In its monthly update on June 8, the realtor said this month the market "appears to be cooling".

The average weekly rent dropped from $342 in April to $336 last month but was slightly ahead of last year's average $333.

Barfoot general manager Wendy Alexander said the total number of houses and units let last month was 592, down from 634 last month, which was consistent with the overall trend for the year to date.

The Real Estate Institute and Tenancy Services Bond Centre has also picked up on rents falling throughout many Auckland suburbs because of an oversupply of properties and the rush of investors into residential property since the boom in 2001.

Takapuna/Milford four-bedroom rents have dropped 23 per cent from $652/week to $500.

Four-bedroom Sandringham property rents have taken a 20 per cent drop, from $475/week to $380.

"It's a tenants' market and the supply is exceeding the demand," said a spokeswoman for Auckland property management specialist Crockers.

The renting game

New Zealand has about 186,000 residential landlords.

Collectively, they own about 250,000 houses nationally.

About a third of people rent.

Home ownership rates are rapidly declining.

In 1986, 73 per cent of people owned their homes.

Now, just 67 per cent are homeowners.

Housing NZ expects this to slip to 62 per cent in 2011.