Rent heat cools as homes are replaced
Demand for $1000-plus rental homes in Christchurch is cooling fast and heat is starting to come off the rest of the market too.
With homes getting fixed and rebuilt, stock across all rental brackets has more than doubled in 18 months.
About 1200 homes are available in the city, up from a low point of 580 early last year, and letting agents report a drop in short-term tenancies.
Property manager Melissa Benge, director of First Avenue, said the extra homes appeared to be steadying rents across most price ranges, stopping further rises.
Most in demand were standard three-bedroom houses renting at $350 to $500 a week, she said.
Tony Brazier, owner of real estate firm Braziers, had noticed rents "flattening, slowly" because of the boosted supply.
The market was reaching equilibrium as more homes were built or repaired, he said. As rents came up for renewal fewer would rise.
The Ministry of Business, Innovation and Employment took almost 1500 rental bonds payments in Christchurch last month, the most for more than two years.
The average new rent was $418, down from a peak of $429 in April. Just prior to the earthquakes, the city's average new rent was about $290.
Braziers director Michael McCormick said there was less a shortage of rental homes than a shortage of cheap rental homes.
Harcourts Accommodation Centre manager Patricia Bowden said furnished short-term rentals, previously funded by insurers or high-paid tradespeople, were sitting empty. Landlords would have to lower the rent to find tenants.
"There's a large number of those properties over $1000 that people just aren't taking up. Those days are numbered."
Benge said landlords were calling to have short-term rentals put into a long-term rental pool.
Trade Me listings this week featured about 165 Christchurch homes for rent in the $1000-plus bracket, as well as another 275 costing $800 to $1000. Most were furnished, and some came with power, phone and pay TV included.
At the cheaper end of the market, demand for what was available remained "very strong", Bowden said.
Anything less than $400 a week was attracting "crowds of people".
McCormick said while rents were starting to level off, the days of cheap rent in Christchurch were gone because new and refurbished stock was replacing old.
"A lot of those older properties that were taken out in the earthquakes had filled that [affordability] need. People are dreaming if they think we are going to return to the past - that's just economic reality," he said.