Lockdown hits the rental market

New Zealand’s rental market hit the wall when the country went into level four lockdown, Trade Me data shows.

The number of people looking at rental properties on the site dropped by 44 per cent in the first week of lockdown compared to a week earlier.

The number of properties being added to watchlists dropped 54 per cent.

But head of Trade Me Property Nigel Jeffries said activity had increased again since.

‘‘During the second week, the number of members viewing properties increased steadily and then spiked dramatically over the Easter break. Now we are seeing healthy signs of activity returning to the market.’’

He said some landlords had withdrawn their listings from the site early in the lockdown but that pattern was no longer so apparent.

‘‘We saw a predictable spike in the number of properties withdrawn during the first week of lockdown but that has slowed down as landlords have clearly decided to see what the postlockdown rental market looks like.’’

He said it seemed that there would be more movement in the market to come. Some owners of properties that had been used for short-term lets were moving them to the long-term rental market.

‘‘The number of fully-furnished rental listings on-site doubled in March.

‘‘This indicates investment property owners may be responding to the pause in tourism by pulling their rentals from the short-term accommodation market in favour of the long-term market.

‘‘It will be interesting to see how this trend evolves in the post-Covid-19 market, particularly as the tourism sector looks set for a long road to recovery.’’

Jeffries said he expected activity to increase quickly in level three.

‘‘Agents are able to return to work in level three as long as they follow Covid19 safety guidelines, so we expect to see things pick up pretty quickly. I’m sure lots of Kiwis will be eager to make a move after a month of being stuck in the same spot.

‘‘We’re now waiting to see what impact Covid-19 will have.

‘‘It’s really hard to tell and we don’t have a crystal ball, but we’re interested to see what moves both landlords and tenants will make in the near future.

‘‘Intervention by the Government, including the six-month rental freeze, will also have a big impact on the rental market and we’re likely to see some lower rental prices in the coming months.’’

In March the national median weekly rent on the site was $510.