14-03-2012
Auckland rent crisis at record high
NZ Herald
Auckland's rental crisis has intensified - average weekly rent for a three-bedroom house has jumped $55 in a month and rents in popular suburbs have risen 25 per cent in the last year.
Desperate renters are increasingly looking further afield than the CBD and its immediate suburbs, as real estate agencies show only a handful of listings in central spots during the market's busiest months.
Intense competition for living space has influenced a 5.5 per cent increase in weekly rent for three-bedroom homes in the year to January.
Figures gathered by interest.co.nz showed rent for a three-bedroom Auckland property rose further still - by $55 per week - last month.
The median weekly price for a three-bedroom rental was now $550.
February is usually the busiest month as tertiary students return to class and the summer holidays end.
But interest.co.nz said the latest increase "easily outstrips anything seen in the month of February" in the six years it had tracked the data.
Real Estate Institute chief executive Helen O'Sullivan said the jump could be a "blip" but Auckland's housing shortage had not been remedied.
"It's getting harder and harder to find a place to live. We've got an increasing problem if we don't get more buildings soon."
She said the demise of finance companies meant developers were struggling to borrow money, and this had contributed to the scarcity of rental space.
Crockers Property marketing manager Kim Sinclair said builders and renovators had reported that elderly homeowners were increasingly renovating their properties instead of selling them and moving to retirement villages. This had exacerbated the shortage of available homes.
Ms Sinclair said her organisation had noticed that people who had been keen to rent in the city were now accepting they might have to live as far out as Glen Eden or Te Atatu.
As well, renters were becoming so disillusioned with the rental market that they were buying earlier than they had planned.
"We've seen fewer investors getting into the market, and more first-timers. They're often turning up with their parents ... for whatever reason, perhaps to get backing from them," said Ms Sinclair.
Crockers' figures showed rents for three-bedroom homes had risen 3 per cent throughout New Zealand in the year to January.
Aucklanders were worst off, paying around $150 a week more to live in a three-bedroom rental than the rest of New Zealand.
In Wellington, the median rent for a three-bedroom house rose $5 to $480 a week - equalling the previous high, recorded in March last year.
In Christchurch, the weekly rent for a three-bedroom house stayed at $350.
Department of Housing figures show median rents for other city centres - $300 a week in Whangarei, $330 a week in Hamilton and $320 a week in Tauranga.
In Auckland, Ponsonby has overtaken Grey Lynn/Westmere as the most expensive Auckland area in which to rent. The median price in January for a three-bedroom rental was $715 a week and $550 for a two-bedroom home.
Central city rents were 20 per cent more for a three-bedroom apartment in January than at the same time last year. This meant those signing agreements last month paid $97 more each week on average than those who signed agreements 12 months ago
The increases went beyond popular, central spots. Mt Albert rental prices for a three-bedroom property rose 21 per cent to $525 a week.
Not all popular areas were affected - three-bed properties in Grey Lynn, Westmere, Remuera, and Mt Eden dropped in price over the 12 months. The cheapest rental properties were in Papakura and Pukekohe, which had a median rental price of $340 a week.
Priced out so it's off to the suburbs
Christie Lundy searched for three months for the perfect central city flat, but settled for a tiny two-bedroom apartment for $370 a week.
The 20-year-old, third-year law and arts student said she considered 24 rental properties in that time, but only two were suitable.
She was frustrated by the huge decline in the number of rentals, and the rapid increases in rent.
"There was probably about half the amount of properties that there were this time last year. And 20 or 30 people were showing up. People were snapping up even the scungiest places ... apartments that are disgustingly cold, and dirty.
"I went into many rental agency offices, and Harcourts in the middle of town had only three listings for the whole of Auckland city.
"There was nothing that was going to be good enough, so we took one. In the suburbs there's virtually nothing."
Ms Lundy said that last February, $320 a week gave her a spacious, one-bedroom central city flat with a view.
"This year that same price wouldn't even get you a glorified hotel room."
Her rent took most of her student allowance, and she and her partner took part-time work to pay other costs.
She was disappointed to see that rent for the central city apartment she had last year had gone up $50 a week.
"I do think to an extent the real estate agencies are really playing on it, just throwing the prices up - a lot more dramatically than they should be."
Source: NZ Herald