colinrealestate

The rental property shortage is heading to a crisis. It continues to be a National trend which is fuelled by lack of construction of new homes and investment by developers. The cost of new builds and the costs of consents (due to stringent council requirements because of the leaky home issue) are also contributing to the shortage. In some areas, landlords are not investing further due to the low return on their investment and the changes in tax depreciation rules. Contrary to this, Auckland has experience a surge of investors re-entering the market.

Tenants are choosing to live in affordable locations and spend more time travelling to their work place. The areas of the country where rents are still affordable often reflect the limited work opportunities within these regions. First National Property Managers are dealing with multiple applications for rental properties, particularly if these properties are of superior quality.

The shortage of rental properties will result in rent prices continuing to increase across many areas of the country – particularly, Auckland and Christchurch. The lack of affordability for first home buyers (with families) may result in many being unable to climb out of the rental cycle and into owning a home.

Filed under: REAL ESTATE | Tagged: Real Estate