Holiday-let effect hits rent market
Tenants looking for a new home have fewer options to choose from.
Data from the Ministry of Business, Innovation and Employment (MBIE) shows a drop in the number of tenancy bonds being lodged from 18,205 in December 2016 to 17,797 in December last year.
The number of bonds lodged fell in Auckland, down 28, but rose in Christchurch, up 122, and were unchanged in Wellington.
Over the year ended June 30, New Zealand’s population grew by 100,400, which was the biggest increase ever in a June year.
Trade Me said the number of available rentals on its site was down 49 per cent nationwide in December and properties were coming on and off the market quickly.
The decreasing availability of rental stock has been partly blamed on property owners turning to Airbnb and other short-term letting websites.
In popular tourist areas, it is possible to achieve a higher rent on a per-night basis. Properties offered as short-term leases will also likely not be caught by the new rules imposing minimum insulation and heating standards on rental properties.
Buyers do not need the usual investor requirement of 40 per cent deposit if they are to let a house out for 47 nights a year or fewer.
In Auckland, there are about 4700 entire properties listed for short-term rental on Airbnb and a further 4400 private rooms for rent. The total number of listings increased by 93 per cent in the past year.
In Wellington, there are about 1600 entire properties listed on Airbnb – that is, three for every for 100 ordinary rentals – and 770 private rooms.
By comparison annual growth in Airbnb listings was 49 per cent in Sydney, 28 per cent in New York and 54 per cent in London.
Auckland property investor Andrew Bruce tried to let one of his Auckland apartments on Airbnb when his tenant went travelling for six months, but ‘‘it didn’t work that well’’, he said.
Bruce said it seemed a good option for properties with a good view, character, or in prime areas.
‘‘This is a small apartment with no view. I would have been better off renting it for six months.’’
Landlords who put properties on Airbnb also had to be prepared for extra costs such as power, wi-fi and more wear and tear, he said.
Head of Trade Me Property Nigel Jeffries said it was not a new phenomenon.
‘‘However, the rise of technology and global companies like Airbnb has made it easier for people to find short-term rentals.
‘‘Undoubtedly some long-term rental stock has gone on the shortterm market but this is a very small percentage,’’ he said.
‘‘In fact, our analysis shows that more baches are going up for sale more than ever before.’’
Jeffries said it was more likely the crunch was due to stricter lending rules, affordability and the growing population.
‘‘With stricter lending, Kiwis are not buying first homes at the same rate they used to and are forced to stay in rentals longer to gather their pennies.
‘‘With more tenants staying put this has resulted in less rentals coming onto the market.’’
Bruce, who is also president of the Auckland Property Investors Association, said the organisation’s membership had tapered off over the past few months.
When asked why they left, people reported that they were selling up, that it was becoming hard to be a landlord or they were not able to borrow any more money.
The Government’s indication that it wants to impose more rules and restrictions on the sector had also concerned some.
Airbnb has been approached for comment.