Rental prices are under pressure as migration soars and stocks diminish. Photo / Bevan Conley
Rental prices are under pressure as migration soars and stocks diminish. Photo / Bevan Conley
Record migration is expected to put “upward pressure on rents” as the supply of rentals diminishes and competition intensifies, a property specialist warns.
A rental agency boss reports it lost six properties in a month as landlords sold up and says some of its tenants “have been pushedout on to the streets”.
One desperate Tauranga mum fears she will soon be couch surfing with her daughter, and another tenant believes her pets are putting off landlords in Rotorua.
Trade Me figures showed in the year to October rental listings in Rotorua dropped 30 per cent and 15 per cent in Tauranga.
Meanwhile, Tauranga median weekly rents jumped from $650 to $680 and from $500 to $550 in Rotorua.
Trade Me Property spokesman Gavin Lloyd said fewer rental properties were on the market “which is impacting rental prices”.
Stats NZ said New Zealand’s population had surged, with a record gain of 118,800 migrants in the year to September.
In recent decades the share of Kiwi households who pay rent has increased significantly from just under a quarter in 1991 to nearly a third in 2018. The number of rented homes rose from about 290,000 in 1996 to 530,000 in 2018 according to the 2018 census.
Bond data from the Ministry for Business, Innovation and Employment showed on November 22 there were 472,495 active bonds in NZ and 26,873 in the Bay of Plenty, up from 458,106 and 22,299 at the same time last year.
‘It’s mind-blowing really’
“This isn’t my first rodeo, my rentals have sold twice before this one,” says tenant Maia Humphrey.
She said if she could not find another rental this week “my daughter and I will be couch surfing yet again”.
“Every time I’ve found a rental it’s been through knowing someone, not applying for houses online. The rent prices are crazy. The house I rented three years ago is currently up for rent again and has gone up $200.
“It’s mind-blowing really.”
For the first time, Humphrey plucked up the “courage” to post on social media.
“[I’ve] viewed and applied for so many properties with no luck. Hoping for a 2-3 bedroom in the Te Puke/Papamoa area but we will be grateful for anything. We are respectful, quiet and I do not drink or smoke,” she posted.
“I really have no idea what we’re gonna do if we don’t find a place in time.”
Kathryn Newland and her beloved dogs.
Kathryn Newland is desperate to move from Tūrangi to Rotorua for work and family but says her two dogs and cat put landlords off.
“My fur babies are the problem… I am on my own and my dogs are my security. I will not give them up for a house.”
The 53-year-old said rental prices were “ridiculous” but she was willing to pay up to $500 a week for a one or two-bedroom home.
‘Pushed out on to the streets’
Nick Gentle from iFindProperty said higher immigration puts “upward pressure on rents and the timing for this is bad for tenants”.
“The construction market for new builds is down in a big way so unless some houses in Airbnb or social housing return to the rental pool, I think it will be tight for the next three to four years.
Nick Gentle from iFindProperty.
“I believe a huge amount of rentals have moved to either social housing or Airbnb or have been sold, so supply has tightened dramatically.”
Tauranga Rentals director Dan Lusby said some tenants “had been pushed out on to the streets” and the agency lost six rental properties in a month as landlords opted to sell.
While it had managed to get new rentals, the demand was “huge”.
The business had let three houses to migrants in a week.
“They come in with their immigration papers and visas and they have got good records. The rental market is not getting any better it’s getting harder and it’s a tight squeeze.”
At Home Property Management mobile rental property manager Hamilton and Tauranga Gregory Young said everyone was feeling the pinch.
“Most landlords are single rental property owners just trying to create a better retirement situation for themselves. We have not experienced too many sales, however, a few have decided to bail out.
“The reasons have been because of rising costs making property less of a profitable investment and legislation changes that have made it more challenging for landlords to get rid of undesirable tenants.
“We have seen many would-be rentals moving to the likes of Airbnb.”
‘Financially difficult to hold on to rental properties’
Tauranga Property Investors Association spokeswoman Juli Tolley said many smaller landlords were choosing to sell off non-performing rentals.
The cost of holding a property had increased significantly alongside the impact of interest rate rises, and the removal of interest deductibility had been the deciding factor for landlords to sell.
Tauranga Property Investors Association spokeswoman Juli Anne Tolley. Photo / Andrew Warner
Rotorua Property Investors Association president Sally Copeland said it had not seen a wave of property investors selling up but agreed rising costs, which also included council rates and insurance, were “putting upward pressure on rents”.
Airbnb Australia and New Zealand head of public policy Michael Crosby said Airbnb played a significant role in the Bay of Plenty economy.
According to Oxford Economics, in the 12 months to March, Airbnb guests spent $263 million in the region, which supported 1800 jobs. Crosby said many hosts were “everyday Kiwis looking to supplement their income”.
A search of the site returned more than 1000 listings in the Bay of Plenty.
More transitional and state homes
Ministry for Housing and Urban Development data showed nationally in September there were 6088 transitional housing places, up 4965 from June 2017. Of those, the Bay of Plenty’s count was up 380 to 424.
Kainga Ora Bay of Plenty regional director Darren Toy said it was delivering more quality homes at scale and pace.
Kāinga Ora - Homes and Communities Bay of Plenty regional director Darren Toy.
As of October 31 Kāinga Ora had 2138 homes in the region. and another 805 in the pipeline for about the next two years.
The national count of 71,518 homes was expected to rise by 9472 in that time.
The Ministry for Social Development’s Housing Register showed 771 people in Tauranga on the waiting list for a state home in the September quarter, down from 807 in a year.
In Rotorua, it 894 down from 1011. Nationally on the Public Housing Register in October 2023 there were 30,525 on the register up 231 from September.
Carmen Hall is a news director for the Bay of Plenty Times and Rotorua Daily Post, covering business and general news. She has been a Voyager Media Awards winner and a journalist for 25 years.
