Christchurch landlords lower rents due to 'oversupply' of properties
Christchurch landlords are being encouraged to lower rents and offer incentives to secure tenants as properties sit empty for up to a month.
The city is facing an oversupply of rentals as earthquake-damaged houses are repaired, new houses are built, and more as-is, where-is properties are listed as rentals.
Ray White Shelleys Property Management director Shelley Scott said she had to teach several property owners about realistic weekly rents over the last year.
"When we go to re-let the property we find we often have to make adjustments."
She recently dropped the rent of a new listing in New Brighton from $350 to $320 a week.
"I've got some properties sitting for a month but the owner is still adamant they don't want the rent to drop. The properties are also in areas where there might be 100 similar properties."
Scott, a landlord herself, said there was an over-saturation of fully-furnished properties in particular.
"In some cases I have had to reduce a couple of my furnished ones by $100 a week, which is quite a lot."
As of Thursday, there were over 1800 properties advertised on Trade Me as available to rent in Christchurch. At the start of March 2013, there were only 582 properties available in the city.
Braziers property management and sales director Michael McCormick said there was "a complete oversupply" of rental properties in Christchurch, possibly driven by the high number of "as-is, where-is" properties available.
Such homes would have previously been lived in by their owner, but were now being rented out.
"There is a shortage [of rentals] in Auckland, but it's the exact opposite in Christchurch because rents have been falling, people have been offering free rent and endorsements like that to secure tenants."
Braziers is advertising a three-bedroom townhouse in Waltham for $379 a week, with the first week free.
Another property in Somerfield, under Bayleys Property Management, comes with one week's free rent and a $150 supermarket voucher.
"It's a great tenant's market at the moment," McCormick said.
Tenants Protection Association manager Di Harwood said rentals remained costly for some, despite more being available.
"We see clients who live week-to-week because their accommodation costs take up a significant proportion of their budget.
"New builds will be out of reach for those who are in this group. They will be renting the older properties, which often come with additional costs. . . . These properties are often more costly to heat and keep warm and dry."
Bayleys Property Management senior property manager Matthew Curtis said he expected rent prices would remain "pretty steady" until more of the city's major rebuild projects were finished, such as the convention centre.
"Once they're operational, you'll see those areas around them grow . . . and that will see an influx of people."
Adding incentives to attract tenants tended to work only for cheaper properties, he said.