Brownlee: Rising housing demand 'positive' for city's future
Christchurch rents have shot up but a major leap in demand is "incredibly encouraging" for the city, Earthquake Recovery Minister Gerry Brownlee says.
According to new Trade Me figures, rental demand rose 47 per cent, rental prices went up 26 per cent, yet supply fell 34 per cent in the second quarter of 2012, compared to the same period last year.
The "skyrocketing" rental prices for prospective Christchurch tenants was "grim" compared to the rest of the nation, head of Trade Me Property Brendon Skipper said.
Labour and community organisations say the figures were "conclusive evidence" of the city's deepening "housing crisis".
But Brownlee told The Press he saw only the "positive" in the numbers.
It was "incredibly encouraging" to see demand rise in the inner suburbs and the average rent rise of 26 per cent would not "flick Christchurch rents out of kilter with the rest of the country", he said.
The population had been expected to decline after the quake and Brownlee believed the figures contradicted that. "I see these figures as being a huge positive for the future of this city. This is a very, very positive story for Christchurch."
The minister said the 26 per cent average rent increase may be misleading.
"In dollar terms, what does a 26 per cent rent increase in Christchurch mean compared to a four per cent rent increase in Auckland?"
An average three-bedroom rental home in the Auckland region cost $495 and a similar home in Christchurch was now worth $404, Trade Me figures show. Last year, the same house in Christchurch would have cost only $330.
Brownlee denied Christchurch's housing problems were a "crisis".
He conceded some people were in difficulty, but housing supply was the critical issue and Trade Me had 786 properties for rent, he said.
Labour's housing spokeswoman Annette King said she "cannot believe Mr Brownlee can take positives out of this grim situation".
"There is a housing crisis. The self-denial and self-delusion from our political leaders is unbelievable. Only a fool would say there is no problem. Unfortunately we have three fools, Mr Key, Mr Brownlee and Mr Heatley."
Tenants Protection Association manager Helen Gatonyi believed the situation in Christchurch was "worse than what the figures show".
"These figures clarify what the community has been saying for a long time. It's conclusive evidence that shows it's already as bad as it can get for many people."
Colin Lock, director of Kennard Real Estate, said the market had been skewed by the premiums paid for short-term, furnished properties entering the rental pool. "That's where we are seeing asking prices go through the roof."
The most vulnerable residents were also the hardest hit and the city was not "too far away" from crisis point, he said.