Rental houses flood market

In one short year, landlords in Northland have gone from hero to zero. The huge jump in the number of properties available for rent has seen a radical change in hiring habits, with landlords no longer in the driving seat.
Late last week, there were 265 empty rentals in Whangarei. The total for the same time last year was 145.
The large number of rentals on offer is a flow-on from the drop in residential house sales.
People who have been unable to sell their houses before moving are offering them for rent rather than leaving them empty, entering a market already packed with investment rentals.
Prospective tenants have so much choice they are now shopping around and even "horse-trading" for a rent reduction before signing up.
Some landlords are waiving a week's rent and paying the letting fees themselves. Where houses and flats stay empty for more than a few weeks, property managers are telling landlords to drop their rent.
Northland Real Estate property manager Lorraine Cheyne says landlords who don't think rents should go down should take a look at the internet listings of empty houses.
Property managers should be informing landlords on what they need to do in a market where buyers are becoming aware they could be pro-active and get a good deal for themselves. But she warned, "it's still essential to choose your tenant carefully".
One Whangarei property investor, who owns about 15 fully-tenanted rental properties, found tenant behaviour had deteriorated as the rental pool grew
"They might be thrown out of one place but they know there will be somewhere else for them," he said.
Vanessa McKenzie, a director of Allens Real Estate, said people hunting for accommodation were now being ruthlessly selective.
Some were making offers below the listed price and looked elsewhere if they were turned down.
"Some landlords are finding it hard to adjust their expectations on rent and identifying where their rental properties sit in the marketplace ... it's not an easy time for owners," she said.
"They are finding it difficult to bite the bullet and accept their rents may need to be $20 or $30 lower a week to secure tenancies in such an over-supplied market."
Landlords should take comfort that the market was readjusting after becoming "highly over-inflated" rather than imploding - but it was a nerve-wracking time for some because no-one knew when it would bottom out.
Judy Morgan, manager of the rental division of The Professionals Whangarei, said some landlords were reducing rents. She cited two recent rent readjustments, one from $330 a week to $295 (Onerahi) and another from $350 to $320 (Maunu).
However, she advised landlords not to lower bonds.
"The bonds are absolutely essential for landlord protection."
RENTALS
265 empty homes in Whangarei
61 - 4-bedroom homes
145 - 3-bedroom homes
59 - 2-bedroom homes