Wellington rental market - shortage of rentals? or shortage of AFFORDABLE rentals?

[Learning]

so you’ve made the investment (by charging lower than current market rent) in a strategy that you think will get you better tenants over the longer term AND you’ve built that strategy based on an assumption that rents are artificially high.

That is your choice and my end up being a great strategy. However you can’t go berating others for their business strategy and choices. The slumlords you refer to are charging what the market will pay.

I never said I charge a lower rent. I also charge market rate. If I raise my rent the slum next door will rise to match. Until we are both priced out of the market. For every tenant who finds a quality rental there are dozens more who will pay what they can afford for what ever is left.

[Learning]

I have great properties and charge top dollar. If the market moves I may need to charge a bit less. Such is life.

If the market drops the first to drop prices will be the lower quality rentals as their tenants find upgrades for the same money.

[artemis]

If the market drops the first to drop prices will be the lower quality rentals as their tenants find upgrades for the same money.

Rents will fall when supply of rentals exceeds demand. Meanwhile, since this thread is about Wellington, here is what the latest Trademe rental analysis had to say -

''Mr Clancy said with growing demand for rental properties in the Wellington region, and tight supply, there will be more record-breaking rents to come. “As house prices in the capital continue to rise, more Kiwis are having to stay in their rentals longer to save for a deposit and this is driving demand.

“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. This supply vs demand equation is pushing rents up really quickly and there isn’t any relief in sight for now. We’re already seeing huge demand and interest in rental properties across the first few weeks of 2019.''

[Don't believe the Hype]

I never said I charge a lower rent. I also charge market rate. If I raise my rent the slum next door will rise to match. Until we are both priced out of the market. For every tenant who finds a quality rental there are dozens more who will pay what they can afford for what ever is left.

you said you keep your rent reasonable. Your definition, infering that your price is low or good value whilst the slum lords over charge.

if slum houses charge the same rent as yours then one of 3 things is happening:

1- you can charge more ( if yours is better) - if they match your price you raise again until the difference between slum and your place is maintained. Then you’ve found market price.

2- people don’t value the improvement you’ve made that you consider better

3- your places aren’t better

[Learning]

you said you keep your rent reasonable. Your definition, infering that your price is low or good value whilst the slum lords over charge.

if slum houses charge the same rent as yours then one of 3 things is happening:

1- you can charge more ( if yours is better) - if they match your price you raise again until the difference between slum and your place is maintained. Then you’ve found market price.

2- people don’t value the improvement you’ve made that you consider better

3- your places aren’t better

You're assuming tenants have time to compare. In a market like this if a tenant hesitates to list the pros and cons then they have already missed both. The market is so over stretched that my good value is equal to the slum's over priced. I could happily over charge and the slumlord will happily match again. LL's are doing very well and slumlords are making an absolute stonking killing.

[Learning]

The seesaw of supply vs demand uses price to balance out difference in quality. But if the balance is massively out then price makes little difference. If it's all supply and no demand then you might struggle to even give your product away, adversely if demand massively exceeds supply (such as Wellington rentals) then you can sell a third rate reject for top dollar.

[Perry]

There's probably some truth in that. But bringing in the hi-vis vest, clipboard-toting bureaucrats would likely make little-to-no difference in the scenario you describe.

[Learning]

It would force the slumlord owners of the third rate rejects to tow the line or sell to someone who will.

[Perry]

If the situation is as desperate as you say, they will just 'go underground,' rather than there being any change.

[artemis]

It would force the slumlord owners of the third rate rejects to tow the line or sell to someone who will.

That was the plan for the Wellington City Council rental warrant of fitness. The initial intention being to give passed rentals a significant edge over the rest. And the next intention to pave the transition from voluntary to mandatory.

So far, getting on for 2 years in, there are 2 passed rentals. Nobody is saying how many failed.

Anyhoo, I'm sure the 2 that passed are tenanted. Like pretty much every other Wellington rental.

The government is to bring in new standards for rentals. And a CGT of some description is promised.

There's a shortage in Wellington, and elsewhere. Costs are rising. Some landlords are selling up and not buying new. Rents in Wellington beating Auckland's. Who would have thunk it.

[Perry]

Donthca worry none. Super duper Dhil has it covered.

[Ellie]

Having just moved out of Welly, I can whole heartedly say that the rental market is ridiculously difficult & quite often people are offering the landlords more rent to secure it. I had 3 really awful landlords (2 private, 1 agency) & I believe they treat people like scum because they have too many choices.

A friend moved into a flat in Petone which seemed fine but after 2 weeks the ceilings were covered in black mould and the bathroom walls leaked water. It had obviously been cleaned up simply for the viewing. When my friend called the landlord, he sent a builder over who said he had been coming to the property for years as the landlord refused to fix the house properly.

I am now in my 4th rental (agent) & so far, things have been a positive experience. I pay $130 less per week for a similar sized property which is warm and nice to live in, plus my commute to work is 10 minutes rather than 30. The difference? I now live in Dunedin

[Don't believe the Hype]

Who would have thought rent prices are cheaper in smaller cities or towns.

[Nick G]

Dunedin PM's tend to have a bad rep too, you must have met some real special ones in Wellington.

[Learning]

15000 more houses needed in Wellington.
Option 1 - Remove restrictions on protected buildings.
2 - Intensify existing housing.
3 - Gobble up more green belt.
4 - (my opinion) Stop growing. We're full enough already. 😋

https://www.tvnz.co.nz/one-news/new-zealand/wellington-begins-planning-up-80-000-more-residents?variant=tb_v_9