Tight rental market ‘utter hell’ for house hunters
Rental prices in the Nelson region have hit new highs, two reports show, on the back of a big fall in the number of rental properties available.
The median rent in Nelson/Tasman rose 10.5 per cent in the year to March to $420 a week, according to the latest Trade Me Property Rental Index. The increase was second only to Hawke’s Bay, where the median rent grew 14.3 per cent to $400 a week.
Competition for rental properties in Nelson, resulting from the shortage, was described by one house-hunter as ‘‘utter hell’’.
‘‘I went to one [viewing] in Oxford St in Richmond, and about 30, 40 people must have turned up, if not more,’’ said the man, who doesn’t want to be named for fear of jeopardising the rental house in Stoke that has taken him and his family three months to find.
The construction worker in his 40s was living in a tent in a campground in Richmond, before ex Cyclone Gita ‘‘blew it to pieces’’ in February, and he moved in with his partner’s family.
‘‘We were going to viewings and my partner was breaking down in tears, trying to tell them how badly we needed a place to live. And the thing I found frustrating was that we haven’t got quite enough to buy a house, but we have money put aside to rent a house, and we couldn’t do either.’’
Despite having $4000 – $5000 of savings set aside for a rental, they kept on getting turned down.
Statistics released by the NZ Property Investors’ Federation on Monday, showed Nelson had the third highest rental price rise of 17 cities and main areas over the past year. The average cost of a rental in Nelson rose 9.2 per cent to $382 a week, the figures for the year to March revealed.
Rental prices in Nelson/Tasman remained static the year before, the Federation’s executive officer Andrew King said.
He said a shortage of rental properties was likely to be behind the hike in rental prices.
Rental listings in Nelson fell 15 per cent in the year to March, although there had been an increase in rental listings of 11 per cent over the past month, figures provided by Trade Me revealed.
Cost increases and rule changes were potentially forcing rental investors to pull out of Nelson, King said.
‘‘The people who are established rental property providers won’t be as affected by some of these regulations as new people coming in. What we are finding is that the new people coming in just aren’t there.’’
Changes in the loan to value ratio, as well as increases in rates, insurance and repairs and maintenance costs in recent years were some of the factors that had put investors off, he said.
‘‘It’s getting harder and harder to provide rental property.’’
People were also choosing not to become landlords because of unwarranted negative perceptions.
‘‘They’re seen as evil people who stop first home buyers from being able to get into the market. They’re seen as charging too much in rent, and yet ironically by the finance industry they’re seen as not charging enough and not paying enough tax.’’