Rental home demand set to push up rents

Rents may be flat but demand for rental homes increased around the country towards the end of last year, which pundits believe must eventually push rents up.

Enquiries on the Trade Me website rose 13 per cent for the December quarter on a year before.

Trade Me Property head Brendon Skipper said the trend was a continuation of strong demand in the previous quarter.

''In the September quarter, we saw the number of enquiries from tenants was up 10 per cent on 2010.

''This quarter it's up to 13 per cent, with Christchurch and three corners of the Auckland super city driving the
growth."

New listings increased 3 per cent but demand was such that there were 6 per cent fewer houses in total on
the site. This meant that properties were turning over more quickly, Skipper said.

''The biggest fear that landlords have is that their rentals stay empty and this supply-demand thing that we're clearly seeing is good news for landlords.''

The biggest fall in listings was in earthquake-hit Christchurch, where a shortage of properties cut listings by
32 per cent.

As a result, demand had jumped an ''extraordinarily high'' 45 per cent and pushed up rents by 10 per cent.

But the same dynamic had not followed through to Wellington, where listings fell 20 per cent but rents inched up only 2 per cent on the year previously.

Skipper said 2012 was shaping up as an interesting year for the rental market.

''If demand remains at its current levels, the flow-on impact is likely to be bad news for tenants, as landlords
will be able to capitalise on strong demand for their properties with increased rents."

Nationally rent rose an average 3 per cent, with Christchurch, Dunedin and parts of Auckland proving exceptions.

Both rents and demand rose 9 per cent in central Auckland, although demand was much higher in Manukau (up 25 per cent), Waitakere (20 per cent) and the North Shore (up 19 per cent).

Dunedin saw rents rise 6 per cent despite a 28 per cent increase in supply and an 11 per cent fall in demand.

TradeMe's data excludes apartments which are considered volatile.

- © Fairfax NZ News