Retirees put pressure on rent market
Retired people in Nelson are contributing to the demand on home rentals, with more people choosing to rent than buy after selling their family homes, some property rental firms in Nelson say.
At the same time there are plans for more growth in retirement villages in Nelson and Tasman ahead of burgeoning growth in the retirement age population, the Retirement Villages Association said.
Quotable Value registered valuer Richard Kolff, of Nelson, said this week on the release of the latest property value movements that QV was noticing a trend of retirees moving to Nelson and renting.
As well, retirees from Nelson were selling their home and choosing to live off the capital and rent rather than buy another property.He said it was possibly higher interest rates that had made it more attractive to invest the proceeds of a house sale with the bank, which would top up other income.
Kolff said it was a trend based on discussions with property managers who had noticed that retirees were selling up large family homes and instead of tying up around $300,000 on a townhouse they were living off all the funds from a house sale and renting.
Long-time rental property manager Kaylene Tasker, of Haven Property Management, and the firm's new executive tenant finderJeanette Aspin said it was something they were seeing more of, but it was a market with specific needs.
It was also very set on price, whereas others might be prepared to move on rental price if they liked a property.
Aspin said her own mother, who had moved to Nelson from Dunedin, had opted to rent instead of buying a home here.
''It's not a huge trend but I'd say there's been a 10 per cent increase in the number of retirees looking to rent instead of buy over the past year,'' Tasker said.
She had three clients who had sold family homes to free up capital and had opted to rent, but it required strict discipline over spending.
''People might have been frugal all their lives and suddenly they have all this money.''
Bolitho Property Management owner Terry Bolitho said the trend was not widespread but it was emerging. He said the biggest tendency in the retired group was the numbers moving straight into independent living accommodation within retirement villages.
''It used to be that nana and granddad would stay in their townhouse until they had to go into a retirement home.
''Now they're selling while they're still active and busy and moving into independent living homes within a retirement home complex.''
Bolitho said the rental market operated on a supply and demand basis.
"All of the retirement villages that have been built in the last five years has had a big impact - it's added to the housing supply."
Retirement Villages Association executive director John Collyns said there were now 11 villages across Nelson, Stoke, Richmond and Motueka which combined, offered about 750 residential units.
There were about 850 residents who occupied these units, plus 43 additional independent rental units offered by the Stoke Retirement Village.
Collyns said that according to the association's records, Stoke was the only village that offered rentals with a straight tenancy agreement, instead of a licence to occupy, which was how most retirement establishments operated.
He said retirement village living offered security of tenure as opposed to open market rentals, but residents paid a capital sum for the right to live in the village and have use of the facilities for as long as they wanted to live there or were are able to live there independently.
In Nelson, the average licence was $280,000 based on the Reinz median price for a home in this region, which was currently $354,000.
At the end of their occupancy a percentage of the initial capital sum, usually between 70-80 per cent, was repaid to the resident or estate.
In some cases the village shared any capital gain on the resale of the unit. The retained amount included the cost of the resident's access to community facilities and the cost of refurbishing the unit was also usually drawn from this fee.
Ray White Xcellence operations manager Wendy Lovering said a more noticeable trend was the number of rental properties being sold by investors, and taken out of the rental loop.
''We're still bringing on new properties but I'd say we've lost more this year than last year through houses being sold.''
Summit Property Management general manager Stewart Henry said there were possibly a few more in that age group looking to rent, but it was not a big change.
''When we do have people like this we like to make sure the property owner is going to hang on to it for a while.''
He said those in the retired age group who chose to rent were more likely to be between homes, and wanted to rent before settling on where to live.
The Nelson Mail