Lockdown rental update
The rental market is changing dramatically across the country as the fallout from Covid-19 continues. Here’s what we’ve witnessed over the past weeks and what changes we might see for tenants and landlords.
Property management from level 4 to 3
Firstly, these are still early days and from what we have already seen anything can happen at pace. During the level 4 lockdown we were unable to list any new properties and the ones that were listed we were unable to host viewings or let them out. So, property owners had empty properties, which adds a real kicker to an already difficult situation for many.
Following the change to level 3 we have seen a flurry of activity with people now able to move and are looking at new properties. We have also had several people contact us who are looking to downsize their rental as they have either lost their job or have had a cut to their income.
More properties available than ever before
The travel restrictions that were imposed during the lockdown has had a huge effect on the Airbnb market that has for many years been one of the factors for the shortage of rental properties around the country. It has been reported that there could be up to 40,000 Airbnb properties coming on to the rental market in the coming months as owners look to long term tenants living in New Zealand in place of the short term market largely consumed by international travellers. Queenstown has already seen a spike in the number of former Airbnb’s entering the market with an 80% increase of listings on Trade Me from February to March this year. The longer the travel restrictions are in place, the more properties are likely to become available. This should be a good thing for renters, but, they’re in areas where there isn’t necessarily a shortage in housing stock – they’re in tourism centres.
Market rental prices
It is still early days to tell what will happen to rental prices after the rent freeze is lifted. Trade Me data shows that the national median weekly rent was up 3% on March 2019 to $510. It will be interesting to see whether rent will stay stable or drop as a result of more properties on the market. In Wellington of course, we may not see too much movement in pricing as we’re not a tourist hotspot with a large Airbnb market.
What about legislation?
During the lockdown, the Government was still progressing with the controversial tenancy law reforms. Written submissions on the proposed reforms closed in March and oral submissions are being heard now. Proposed changes will make it harder to remove tenants when things go south and will allow tenants to make minor alterations to the property they’re renting.
Nice Place made both a written and oral submission to Parliament to try to ensure changes that are made are sensible and help, not hinder, the market. This is something to keep an out for whether you are a landlord or tenant.
Here to help
These are still challenging times for everyone, and we still don’t really know what’s around the corner. But if you need advice on what to do with your rental property during these times please reach out. We have a team of experts behind us including investment mortgage brokers, SME insurance advisors, trades people using top notch contact tracing, top real estate agents, and conveyancing lawyers who we can refer you to, to assist with any situation. Call us on 04 389 8840.