Rentals in Central Auckland

[essence]

I was watching the news last night (24/3/12), sorry to say I'm unsure whether it was TV1 or TV3 (hey, they're all generic!).

Anyway, there was an article on rental prices rocketing in central Auckland. We all know the reasons for this lack of rental properties - investors not buying, investors selling off their stock to owner/occupiers, lack of development finance for builders, tenants not moving, investors having to put up rental prices due to the new depreciation rules.

The article focused on a couple looking for a two bedroom house in CA and their budget was $400/pw. When the time for the open home turned up, in the first 20 minutes there were 20 applications for the house they were looking at. The letting agent was interviewed and freely admitted that they are being offered wonderful references etc as well as a higher weekly rental, just so tenants can get the house.

So, they decided to look at 3 bedroom houses and take in a flatmate. The average price range was $585/pw!!

It is reported that prices in CA will potentially climb by another $100/pw by the end of the year.

This is fascinating, appalling, interesting all at the same time.

Could some of the LL's with CA houses/apartments give some anecdotal stories please? Those of us in the rest of NZ can only dream of these sorts of weekly rental incomes.

[flyernzl]

TV3 news:

http://www.3news.co.nz/Housing-shortage-leads-to-rent-hikes/tabid/309/articleID/247934/Default.aspx

Based on operating costs and property prices, $800 a week would not be unreasonable.

[Davo36]

Well as someone who created 3 extra residential tenancies in Auckland and had an extremely difficult time doing so, I say bring on the rent increases.

I feel sorry for renters, but this has been created by central and local government policies.

Can't wait for this sort of pressure to move out to the 'burbs!

[Orkibi]

This is something like "we told you so!" was predicted do to under supply of housing and the depreciation Tax changes.
Thank you very much!

[eri]

from the outside

central auckland apartments may appear to be all

pretty much the same

but they're not

2 bedrooms can range from a yuck 30?m2 <$300pw

http://www.trademe.co.nz/property/residential/to-rent/auction-453154036.htm

http://www.trademe.co.nz/property/residential/for-sale/auction-460792221.htm

to stuff over $1000pw

http://www.trademe.co.nz/property/residential/to-rent/auction-404471309.htm

http://www.trademe.co.nz/property/residential/for-sale/auction-459931538.htm

certainly

a cheap 2bed bought for $200,000

can rent for about $400pw

[Guardian Property]

Hi there, I was the letting agent and also GM for Guardian Property Management (property investor also for the last 7 years) who was interviewed on the TV3 segment you are talking about. The rental was advertised at $585p/w with DBH statistics showing a median rental price of $630p/w in Mt Eden so in fact the home was more affordable ( laughable I know) than most in the area.

Certainly folk sometimes offer more for a property in order to secure it but they would not be offered the property solely on that basis. We handle these situations delicately and without manipulating prospective tenants into offering more than advertised rent. A 'Dutch' auction usually ends in a soured relationship with tenants once the 'high' of finally securing a new home dies down and can become problematic with them feeling taken advantage off. Likewise we work for the owners who want premium market rent, the misconception that owners of rental properties are 'rolling around in cash' is just that, as they have mortgage responsibilites to meet on their rentals and need their 'business' run to an optimum level. We deal with a lot of folk who live overseas and our on line log in for them to view inspection information but primarily their financial statements/rental payments is well used!

[Perry]

I know Auckland is a 'place apart' in many respects, but I suspect
that the effects there will roll out across the country, as red tape
and bureaucracy continue to stifle development. And not one of
the W'gton woodenheads can say they weren't warned, no matter
how much soothing noise was murmered by their unreal world policy
advisers and analysts.

Despite agreeing with the "bring it on" and "let it happen" perspectives,
the architects of this will not be the ones to feel the pain - as always!

[AMR]

Next step: Russell Norman makes it official green party policy to limit rent increases to a maximum of 4% per annum or the rate of inflation, whichever is less.

[flyernzl]

Certainly folk sometimes offer more for a property in order to secure it

Actually, that is nothing new.

Years ago - I guess around 1998 - I advertised a three bedroom house for rent at the then market rent of $250 a week.
As is my wont, I arranged for prospective tenants to all meet me at the house one evening.
After talking to those who turned up, I'd mentally selected a nice family, husband wife and two kids, as my preferred tenants.

Then a group of three young adults arrived, checked the place out, and told me they'd like to take it.
"Well, actually I think I've already decided on someone else" I muttered.
"What would it take to get you to change your mind?" they asked.
I rubbed thumb and forefinger together.
"OK, we'll pay $280" they said.
"You're in" came my reply. $30 a week is not to be turned down.

So I got the $280, and the group, with a few comings and goings, stayed for five or six years.

[WaterfrontNZ]

I do not look forward to this kind of thing at all. I myself am young, and to enter into a job, and to start trying to afford a place like this to live, it's going to be near impossible. Renting is meant to be cheaper than buying and having a mortgage, however at these kinds of costs, I am never going to be able to get a kick off the ground. Does that mean I will have to move elsewhere? As another poster said, chances are these kinds of pricings will spread out of Auckland as people look for work and housing elsewhere, the price trend will move with them.

Not a nice prospect.

[revdev]

Does that mean I will have to move elsewhere?

This isn't a new thing. My folks are from London originally - couldn't afford to buy a house there so moved to NZ (1974) where they could afford it. Drastic I know, but it's not a new phenomena.

[WaterfrontNZ]

This isn't a new thing. My folks are from London originally - couldn't afford to buy a house there so moved to NZ (1974) where they could afford it. Drastic I know, but it's not a new phenomena.

Oh no, I totally agree, my parents did this also, but moving to be able to afford a rental? And when the price follows, then what? Just a kind of downward spiral.

[flyernzl]

Renting is meant to be cheaper than buying

Why? Who says so?

[Perry]

If the rent is close to the mortgage payments,
why rent? Been there, avoided that.

[WaterfrontNZ]

Why? Who says so?

As Perry says, renting coming to the same value of mortgage payments, buy. Then you own the place. No pesky LL to worry about. If renting was more expensive, why would people rent and just not buy, and then have some return (hopfully) on the place when they sell?