Rental Property Vacancy rates

[artemis]

Meanwhile in Auckland -

Aucklanders share beds with flatmates, rent out living rooms as housing crisis bites

https://www.stuff.co.nz/business/property/109960285/aucklanders-share-beds-with-flatmates-rent-out-living-rooms-as-housing-crisis-bites

[Don't believe the Hype]

Porirua has seen a spike in listings this last week to 36 available rentals, nearly back to the level when I first posted about it.

Only 4 properties under $400/wk of which only 1 is a 3br. This property recently sold and based on this rent level sold on an 8% Gross Yield.

Of note is that the lower end areas are seeing 3br townhouses asking $430 and $440 per week which is a big jump even on 6 months ago where these were renting for $380/wk.

[Wayne]

These shortages happens every year at this time (students) - nothing new here.

[Don't believe the Hype]

This stuff happens every year at this time - nothing new here.

You're right - the spike always happens in Jan. What is interesting is:

1 - Rents are about $100/wk or 30% higher like for like vs. a year ago - (well not really like for like in that they now need to be insulated)

2 - That the spike is only back to the levels of September not beyond that level. In the past the spike has been far above the long term average level of available rentals.

[artemis]

These shortages happens every year at this time (students) - nothing new here.

That is true. Maybe. But how much of it is media reporting? It is noticeable that it is student organisations making the most comments in the media, mainly because they are organised and that is their job. Plus plenty of staff writers were students themselves 5 minutes ago and relate. Seen it in practice.

Tenants are not organised in anything like the same way, and generally only pop up in the media time to time. The more cynical among us might think there are ulterior motives, personal or political.

There is recurring data available but it doesn't have the impact of a photo of a queue of 50 outside a rental. The Trademe property indices are good as they are published monthly, good at comparing against other locations and periods and are clear about what and how they measure. Plus they are usually picked up by the main stream media.

[Wayne]

That is true. Maybe. But how much of it is media reporting? It is noticeable that it is student organisations making the most comments in the media, mainly because they are organised and that is their job. Plus plenty of staff writers were students themselves 5 minutes ago and relate. Seen it in practice.

Tenants are not organised in anything like the same way, and generally only pop up in the media time to time. The more cynical among us might think there are ulterior motives, personal or political.

There is recurring data available but it doesn't have the impact of a photo of a queue of 50 outside a rental. The Trademe property indices are good as they are published monthly, good at comparing against other locations and periods and are clear about what and how they measure. Plus they are usually picked up by the main stream media.

How much is media - probably lots.
Never let any facts get in the way of a good story.

Generally the public isn't interested in facts - their eyes glaze over.
Politicians, especially, know this and use it to their advantage.
Try to counter with facts and you will lose as you lose peoples attention very quickly.

[Don't believe the Hype]

What I’m noticing recently in the data for Porirua is that the low end rentals have risen from the $300/wk range to $400/wk for 2br to $650/wk for renovated 4br while the higher end suburbs are not rising anywhere near as fast.

i wonder if the added risks caused by TT rulings associated with low end rentals is being priced into these rents where as it’s not priced into higher end areas.

[artemis]

From Trademe's monthly analysis -

"In December, the number of rental properties in Wellington fell 7 per cent on the year prior and we’ve seen a 15 per cent increase in the average number of enquiries."

7% fewer is a lot of rentals. Some caused by tenants staying put, some by landlords selling up.

" Mr Clancy said while large houses (5+ bedrooms) in Wellington dipped 18.2 per cent year-on-year, they are still the most expensive house type in the country at an “eye-watering” $900 per week."



property.trademe.co.nz/market-insights/rental-price-index/wellington-is-new-zealand%E2%80%99s-most-expensive-city-to-rent/

[artemis]

What I’m noticing recently in the data for Porirua is that the low end rentals have risen from the $300/wk range to $400/wk for 2br to $650/wk for renovated 4br while the higher end suburbs are not rising anywhere near as fast.

i wonder if the added risks caused by TT rulings associated with low end rentals is being priced into these rents where as it’s not priced into higher end areas.

Compliance costs are much the same but takes longer to recover them for lower rent properties.

[Don't believe the Hype]

Consistently mid 30’s available rentals through Jan. There are about 4 options under $400/wk with only one being more than 2br.

this might be an availability recalibration. Or not

[Don't believe the Hype]

Two weeks later and the no. of available rentals has grown to 39 - the most there has been for more than 6 months. In the past few days some downward pressure on rents with the first offering under $300/wk this year.

There is also 8 options under $400/wk although only 2 suitable for a family (i.e. 3br +)

Lots of 1 and 2 br options for students complaining about the cost of accommodation in Wellington. For those willing to buy a train ticket there is cheap student accommodation. The 31 mins study time each way on the train might even help their grades.

[Don't believe the Hype]

Rents in wellington region on the up and up...

https://www.stuff.co.nz/business/110585019/warning-wellington-tenants-will-feel-the-pinch

[artemis]

Rents in wellington region on the up and up...

https://www.stuff.co.nz/business/110...feel-the-pinch

Based on the Trademe monthly analysis. It has a lot more information than the article, including median rent by location and number of bedrooms..

Wellington rents $45 more per week than Auckland

property.trademe.co.nz/market-insights/rental-price-index/wellington-rents-45-more-per-week-than-auckland/

[Don't believe the Hype]

Today I did a review of my portfolio looking at the progression of rents over time. The interesting data point that came out was that market rents have increased 33% since Sept 17.

I wondered if this was drive by the recent reduction in available rentals but given available rentals have increase dramatically over the past month with no signs of rents dropping I don’t think it’s the driver. Will be an interesting month or so to see what happens from here.

[Bob Kane]

I wondered if this was drive by the recent reduction in available rentals but given available rentals have increase dramatically over the past month with no signs of rents dropping I don’t think it’s the driver.

This suggests it's the number of tenants driving the rent increase, not the number of rentals.