OPINION: Asevere squeeze on housing in and around Christchurch was not unexpected after the devastation wrought by the earthquakes.
Not only were thousands of people left seeking new homes after their old ones were destroyed, there were also the thousands more needing accommodation while their damaged properties are being repaired.
But the fact that the squeeze was expected does nothing to make the reality of it, particularly for those desperately seeking homes for their families, any less unpleasant.
The shortage at present appears to be most acute for those seeking to rent a property. Statistics compiled by Infometrics, an economics forecasting and consulting firm, certainly paint a striking picture.
The median rent for two and three-bedroom houses has risen by more than 10 per cent in almost every suburb, far above the general rate of inflation of not much above 2 per cent.
Beyond the statistics are the anecdotal accounts of such things as would-be renters engaging in bidding wars virtually on the doorstep of desirable properties in impromptu "rental auctions" to try to win a lease.
The steep rise in rents is undoubtedly being skewed by insurance companies paying to accommodate clients while their houses are being repaired. That means that anyone covered by insurance is relatively protected.
On the other hand, many, such as those who are not able to live in their homes but have still not received an insurance settlement or those coming to the city to help with the rebuild, do not have that protection and are feeling the pinch.
Some of the rise in rents may also be attributed to the rental market in Christchurch catching up some lost ground. For some time before the earthquakes the market had been relatively flat and for a time after the disaster there was still not much movement. Now that demand has spiked again, property owners have been able to make up for the period of stagnation.
There is a dispute about whether all this constitutes a "crisis" - the label nowadays for just about every adversity. According to some rental companies, the statistics cited by Infometrics present a more alarming picture than the facts on the ground warrant. Some also believe that the bulk of the rise has occurred over the past few months and that the market has reached a plateau.
It must also not be forgotten that the rise in rents is also the reaction of the market to a sudden rise in demand. To a degree, this is desirable because it will almost certainly elicit a corresponding rise in supply. That can be seen, at least anecdotally, by an apparent proliferation of "for rent" signs outside properties in some suburbs.
The adjustment of the market will take time, however. Government rent controls, as many will remember from the disastrous experience of the Muldoon years, are out of the question. But what Christchurch does not need is people unfairly exploiting those made vulnerable by the earthquakes. Rental companies should be constrained by the desire to protect themselves from getting a reputation for profiteering.
The market in rental properties is, however, very fragmented, with many landlords letting out just one or two properties they own. They may not have a company reputation to protect but it is just as much incumbent on them to behave ethically and fairly and not to take advantage of what is, after all, likely to be only a temporary situation.
- The Press