A question for old-time property managers

[AMR]

So I was looking at the average rent data from the Department of Building and Housing, did up a quick graph. The years between 1996 and 2001 show five years of static / declining rents. Was anyone around at that time? What was happening in the industry?

[Keys]

That's the time I started in the game. The properties always got rented, just for the same as before. Advertised in the local paper rather than Trade Me.

My personal situation was such that I didn't pay particular attention to the scene, just more attention to my rentals. It was at least two, possibly three years of very tight budgeting for me.

[Cassandra]

Rents, along with corporate and personal incomes, are generally linked to supply and demand .

[Ahar]

Rents, along with corporate and personal incomes, are generally linked to supply and demand .

Rents can and do decline.....not just in nominal values but in real dollars.

Going back even further than your data, I recall the very late eighties rents really declined.....by about 5 - 10 percent.... in my case the rent on a 3 bedroom house went from $220 to $205 pw....quite a drop

But then interest rates were also declining just as rapidly, so ended up not much worse off.............until of course there was increasingly large gaps between tenants

A lot of properties became hard to rent as tenants became very picky

All due to a weakly performing economy.....high unemployment etc driving rents down

You have to look at the reason for the change in supply and demand....not always due to migrants

I learnt very quickly to allow a lot of wiggle room......... don't ever again want to find myself in a very highly leveraged position in the midst of a severe recession

[Bluekiwi]

"The Asian Crisis" hit then.
I know, as 1996 was the first house I bought and I made every mistake in the book, a cross between a sheep and a lemington, I was in well after even the taxi drivers had started talking about it.

Think negative immigraion, rising interest rates to 11.8%, think poor economic conditions and high unemployment, falling house prices.
Exstreme difficulty finding tenants, I would say rents went down 10 to 15% from 1996 to 1998.

This was the background to my first dip into property, with a subdivide and build plan, to double my problems.
Leverage in all fine and dandy in property when the market is going well.

By 2001 I had managed to convert 50k deposit into 50k negative equity.

The best learning experience I ever had though.
Worth every penny of it.

Although I had recovered by 2003 to close to break even.