Flat-hunters face fierce competition in Manawatu as rental market tightens further
It's getting harder to find a flat in Manawatu as more people compete over fewer available rental properties.
The region's rental market has been tightening for the past two years, and has got particularly crowded in the past three months, say three Manawatu property management companies.
More people are moving into the region, people are renting latter into their life, and more landlords are selling up.
And although there has been a slight increase in the number of new rental properties in the past month, it has not kept up with demand and competition is fierce.
* Silver lining to Manawatu/Whanganui's rising rents as large homes get cheaper
* Manawatu/Whanganui house prices push to new all-time high, under a year after setting new record
* New loan restrictions causing headaches for Palmerston North rental owners
* Lack of rental houses in Manawatu pushes prices up
Watson Real Estate business development manager Greg Watson said the rental market tended to follow on from the housing market, and Manawatu's market has been ratcheting up since the region's house prices took off in 2015.
This month, 99.5 per cent of Watson rental properties had tenants in them, and in July they didn't have a single flat available in Feilding.
Watson said the rising house prices, and the increased deposits needed to get a mortgage, meant people were flatting well into their 30s as they saved for a home. And more people were moving into Manawatu than in the past few years as well.
Both factors were putting extra strain on the region's housing market, he said.
QV figures show Palmerston North's average house value sat around $280,000 between 2010 and 2014. It jumped up $10,000 in 2015 and by this July the average house was worth $360,000.
"If you're waiting to build or have just moved into the area you're likely to be renting, at least at first," Watson said.
Jpac Homes co-owner Paul Haydock said demand for new houses was so high in Manawatu it could take up to 18 months to get a first consultation with architects and builders.
Palmerston North City Council figures showed Manawatu had a net gain of 1253 migrants move into the region in the 12 months to June, a 19 per cent annual increase. Overall, New Zealand immigration increased 5 per cent in the same period.
Watson said there were 2.6 people to a flat on average, so that meant 482 extra houses had to have become available for rent just to deal with the new migrants, which came on top of the growth in people already living in the region.
Professionals business development manager Jodi-anne Taiapa said over 97 per cent of their Manawatu properties were occupied, but the biggest change wasn't the number of listings but how quickly they were going.
Professionals were seeing a lot more new investors and landlords coming into the rental market than usual this July and August, she said. But that has been outpaced by the increase in demand.
"Normally everyone hibernates over winter, but there's a lot more people out looking this year."
"August is going to be crazy, already we're renting at least one place out every day... [and] most properties are getting rented after the second viewer."
Ray White property management manager Karen Hopkins said the recent rise in new landlords was yet to balance out the drop in rental properties over the past year.
She said regulations around rental properties were stricter now, and some landlords were concerned by potential policies such as the Labour Party's plans to eliminate tax breaks for property investors. So they were getting out of the business.
"The 2016 health and safety changes applied to landlords as well, and with the election this year there's been a lot of uncertainty.
"So a lot of landlords, particularly older rental owners, have been selling up while the sales market was good."