Like house sale prices, rents have been climbing over the last two years, but headlines aren’t telling the whole story.
At a glance, this article indicates all is well for landlords, but a recent rental market report from TradeMe says: “The main centres saw by far the largest supply jumps last month, with the number of rentals available in the Wellington region skyrocketing by 26% year-on-year, followed by rentals in the Auckland region increasing by 5%.”
And as at Friday 3rd June, rental listings were:
- Lower Hutt – 214 properties
- Upper Hutt – 54 properties
- Porirua – 59 properties
- Wellington – 1069 properties
- Hawke’s Bay – 80 properties This is easily the highest number of properties we’ve seen for rent at once in recent times – not long ago there was such a shortage of supply that renters have been willing (sometimes even desperate) to snap up properties quickly.
Tenants who are now looking for a new place to call home have ample choice, and with winter upon us, the volume of people moving house slows through the cooler months.
Add to the mix a corresponding increase in sale listings being withdrawn as prices decline. In some cases people may look to rent their property while waiting for the market to change - a great way to ride out a real estate slump, however, this means an even greater supply of properties for rent.
The property investment clock is a useful method for tracking the market cycle, and it’s important to understand where we are in the cycle.
Based on the recognised stages of the property cycle: a “boom” is followed by a downswing in prices, then a “slump” as the market hits the bottom of the cycle, followed by a recovery period as the market builds towards the next “boom”.
We’re now in a slowdown phase of the property cycle where demand has weakened, supply is up, but prices remain high. There is a reduction in activity across the industry in both sales and rentals, and we currently have a lot more housing stock available for longer. Properties will still get rented, but at a slower pace than we have experienced in recent times.
Properties need to be at their best in today’s market, well presented and well-maintained. If you’re currently re-tenanting your property or you will be shortly, our team may suggest some recommendations to position your property to attract the best tenants for your home in the current market.
This might include a slight rent adjustment, viewing times, property condition, comparative properties on the market, additional marketing options and other ideas to make your property more attractive to tenants than the place down the road.
There’s no need to panic, it’s all part of the normal ups-and-downs of investing, and our team will continue to monitor and assess market rents and always do our best to get your property tenanted in a timely fashion.
As always, we appreciate your business, and your Property Manager is only a phone call, email or text away. We are always available for a free chat and are happy to share our experience and knowledge wherever and whenever we can.
