Anderson said “mum and dad landlords” were selling properties due to the removal of interest deductibility and rising interest rates, as well as changes to tenancy laws which made it difficult to easily remove tenants and use their own properties as holiday homes.
“Another reason is that many owners are baby boomers with investment properties originally purchased as a retirement nest egg that they now want to free up.
“Houses are then coming out of the rental pool, with investors still not buying in a market that requires them to have a 40 percent deposit and no tax deductions on interest,” she said.
For those still holding on to rental properties, they needed the security of knowing they could sell easily if their finances “stop adding up”.
Subsequently, they were more reluctant to put tenants in on longer, fixed-term tenancies, so periodic tenancies, which rolled over from month-to-month, were becoming more common, which allowed sellers to list with vacant possession in the contract, she said.
Anderson said Queenstown’s rental crisis was having a “ripple effect” on the entire area.
“The high cost of living in the region has also had a big impact on the local economy, with many businesses struggling to attract and retain staff due to the lack of affordable housing options.”
Seeing the increasing number of businesses, desperate for workers, purchase properties to house their employees indicated “just how compounded the situation has become”.
Recent housing market data showed the housing market slowdown across the country had less of an effect in the Queenstown-Lakes, with the average property value dropping far less than in areas like Auckland and Wellington - 18 per cent of agents in the Queenstown-Lakes felt house prices were falling further in their region than three months ago, compared with 59 percent of agents in other areas nationally, Anderson said.
