Tenants struggle to meet high rent

LIZ MCDONALD
Last updated 05:00 09/07/2013

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Canterbury's spiralling rent prices have reached another all-time high, now costing only $70 less a week than the fulltime minimum adult wage. 

Website Trade Me showed the region's average asking rent, including furnished short-term rentals, was $480.  

This was 22 per cent higher than a year ago, and incomes are not keeping up.  

The Ministry of Business, Innovation and Employment puts the average Canterbury household income at $75,800.

This means for the average renting household, a third of its earnings will be spent on rent.

The minimum fulltime adult wage is $550 a week.

A recent Tenants Protection Association survey found Christchurch tenants had faced average rent rises of $43 a week, with over half paying more than 40 per cent of their annual income in rent.

The rent rises had created problems for most of the tenants surveyed, with many reporting feeling stressed, worried and fearful of the future.

Half had mould in their homes.

The biggest rent increases in the survey were in the inner northern suburbs including St Albans and Papanui.

''Tenants can't afford to pay for power bills, food, petrol, or going to the doctor,'' said association head Helen Gatonyi.

Rising rents meant they could not afford better housing or save for a house deposit, she said.  

''Enough is enough - it's time for this government to take some action to ensure the well-being of tenants does not continue to deteriorate.'' 

Gatonyi called for debate on rent stabilisation and other measures to help.  

Christchurch couple Chloe and Will Jones felt ''lucky'' to find a one-and-a-half bedroom rental in Shirley for $260 a week, but wanted somewhere bigger for their 2-year-old son.

The couple, who were both studying fulltime, earned about $500 a week through part-time work, leaving it impossible for them to find anywhere else, Chloe Jones said.

''It does for now, but we don't have a backyard and we have to share the garage and stuff with the shop [at the front].

''I don't know how people can live in Christchurch really.'' 

Leasing agent Patricia Bowden from Harcourts said the worst shortage was for homes with rents under $350 a week ''and if we do advertise one we get a rush of people inquiring about it''.

Rebuild workers arriving with families and homeowners sitting out repairs were adding to demand, Bowden said.

Official figures based on bonds put the average Christchurch rent rise at about 12 per cent, depending on suburb.

Trade Me said rental demand in Christchurch was 16 per cent higher from April to June than the same three months last year.  

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Those hoping to get on the housing ladder face similar woes. The region's house prices have hit a record median of $365,000, a jump of 12.3 per cent in a year, as buyers compete for homes.

Real Estate Institute figures show Canterbury has the fastest-selling homes and the fastest-rising prices of any New Zealand region.

The institute's regional director, Tony McPherson, urged more progress on construction, saying it was the only way to keep price rises in check.  

He described the lack of homes as acute and a concern.

''We've got to get new homes built and repairs done - there's so much pressure on the existing houses on the market and we don't want a situation with over-inflated prices,'' McPherson said.  

Christchurch economist Robin Clements said it would ''take a long time to relieve the issue'' of the shortage.  

''It's still going to take years to increase the supply, even if action is taken now."

Even the slowness of the cental city rebuild was affecting the housing market, Clements said.

There's a shortage of hotels, so visiting businesspeople have to stay in motels. Then people having their homes repaired can't get a motel, so they're taking up rental homes.

"Every section of housing has got some sort of pressure, and it's all linked to the pace of the rebuild.'' 

Listing website realestate.co said the supply of homes for sale in the city was at a six-year low as strong demand coincided with a mid-winter dip in listings. 

The average asking price on its site had climbed to $410,723.

- The Press

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