Up to 26% jump in rents forecast as ‘perfect storm’ hits

Rents may rise up to 26 per cent as property shortages hit the market.

Property Institute chief executive Ashley Church said research pointed to rent rises of up to 26.8 per cent in Christchurch in the past year and other big jumps elsewhere.

The new Government’s plans for the rental market, loan restrictions and historically high immigration levels had created a “perfect storm”, which he said would cause further rent rises.

“It’s all leading to a perfect storm of circumstances and means that we’re in for big rent increases in some parts of the country over the next couple of years,” Church predicted.

The Property Institute/Valocity Regional Insights Report showed a 26.8 per cent annual average rent rise on a five-plus bedroom Christchurch house from $725 a week last year to $917 a week in the third quarter of this year.

Average rents on one to twobedroom homes in Hamilton rose 9.2 per cent, from $316 a week to $354 a week, he said.

Auckland rental property management business Crockers also released information this week showing how gloomy landlords had become since the election of the new Government.

They found 34 per cent of investors were negative about recent housing policy announcements, while 27 per cent were positive and “44 per cent expect residential property prices to decline in the next 12 months, up 10 points from June”.