Auckland rental property market - Aaaarrrgghhh!

[Madness]

A lot of people will be aware from recent media coverage that Auckland has a pretty severe shortage of rental properties to meet current demand. We've recently found this out first-hand after our landlords returned to N.Z from Tokyo a couple of weeks ago following the crisis there. We have until the end of April to vacate our current home so the owners can settle back into their property.

Problem is that we have two dogs and the current market is such that anything half decent seems to be turning into a bidding war amongst non-dog-owning tenants.

For example, there was a place listed at 9am on Tuesday of this week in Glen Eden for $460 per week. By 6pm we had a call from the owners that they had received multiple offers, with the highest at that stage being for $680 per week on a 24 month lease. Christ knows what it's up to by now but needless to say we pulled out on Tuesday.

I held off on posting this here to be honest. There's a lot of people left homeless in Christchurch and I'm sure there's a lot of Kiwi's with more than ourselves to worry about. That said, I'm starting to shit bricks :shit:.

So, If you win the Powerball Jackpot this weekend and consequently find yourself thinking of investing in rental properties - please flick me a pm.

Cheers.

[Edbear]

If you don't mind commuting there are a few rentals up this way.

[Hiflyer]

Yea tell me about it, I started looking for a place for myself and my partner in mid dec and was lucky enough to find a place by the end of jan, but what that involved was calling literally 3mins after it was listed on trademe and arranging a viewing 30mins later then saying YES! NOW! PLEEEEASE! haha

but all the best mate and good luck!

[Madness]

Been living in Manukau since moving up from Wellington 3 years ago. We're in Beachlands now and love the semi-rural "village" feel of the place. Her Indoors has a part time job in East Auckland & we're trying to stay on this side of town if possible. I think we might end up casting the net further afield pretty soon though as it's starting to look pretty grim out east.

[boman]

Would you be interested in Pukekohe?

[JimO]

lots of LLs dont like dogs

[Lucyloo]

I agree it's dire! My partner and I are looking at down sizing as his 3 adult boys are finally flying the coop. It's difficult to find a 2 bedroom place with a 6 car garage! Well a double garage would suffice I guess as long as the bikes have a warm dry place to sleep. We are looking at east Auckland too - not much around that we can afford!.
L.

[Bender]

And not long ago all landlords were bastards getting incredible tax breaks.

So the Gummint removed the wonderful tax breaks.

The landlords said 'bugger this it ain't worth it' (that and the number of tenants who trash properties, take off leaving rent unpaid, turn places into P labs). There is no comeback for a landlord when someone leaves without paying rent.

Hey presto, no rental accommodation and what there is, is bloody expensive.

[nosebleed]

$680 for Glen Eden! Fukkin hell.

I take it you received your full 42 days notice? (s. 51 Residential tenancies Act).

[Brett]

And not long ago all landlords were bastards getting incredible tax breaks.

So the Gummint removed the wonderful tax breaks.

The landlords said 'bugger this it ain't worth it' (that and the number of tenants who trash properties, take off leaving rent unpaid, turn places into P labs). There is no comeback for a landlord when someone leaves without paying rent.

Hey presto, no rental accommodation and what there is, is bloody expensive.

You're not wrong. However, if rental investors stopped trying to make money out of writing their tax losses off and focused on properties that generated income, then they might find it more attractive. Personally, i have found a few properties for sale in East Auckland that I think are great deals that are slightly cash positive and would be happy with as investments.

[racefactory]

A lot of people will be aware from recent media coverage that Auckland has a pretty severe shortage of rental properties to meet current demand. We've recently found this out first-hand after our landlords returned to N.Z from Tokyo a couple of weeks ago following the crisis there. We have until the end of April to vacate our current home so the owners can settle back into their property.

Problem is that we have two dogs and the current market is such that anything half decent seems to be turning into a bidding war amongst non-dog-owning tenants.

For example, there was a place listed at 9am on Tuesday of this week in Glen Eden for $460 per week. By 6pm we had a call from the owners that they had received multiple offers, with the highest at that stage being for $680 per week on a 24 month lease. Christ knows what it's up to by now but needless to say we pulled out on Tuesday.

I held off on posting this here to be honest. There's a lot of people left homeless in Christchurch and I'm sure there's a lot of Kiwi's with more than ourselves to worry about. That said, I'm starting to shit bricks :shit:.

So, If you win the Powerball Jackpot this weekend and consequently find yourself thinking of investing in rental properties - please flick me a pm.

Cheers.

Best of luck to you. 680 and counting? Fuck that shit to hell. I'll look after your dogs for a while if you end up in dire straits.

[Gremlin]

And not long ago all landlords were bastards getting incredible tax breaks.

So the Gummint removed the wonderful tax breaks.

The landlords said 'bugger this it ain't worth it' (that and the number of tenants who trash properties, take off leaving rent unpaid, turn places into P labs). There is no comeback for a landlord when someone leaves without paying rent.

Hey presto, no rental accommodation and what there is, is bloody expensive.
Can't have the poor tenants paying the evil landlords heaps huh? It wasn't THAT profitable as it was...

The tenants are muuuuuch better off now...

/sarcasm

[Mom]

So, If you win the Powerball Jackpot this weekend and consequently find yourself thinking of investing in rental properties - please flick me a pm.Cheers.


Put the dogs in kennels up this way (cheaper) and crash at ours while you are looking for a place to stay, I wont charge too much and think of the fun we could have :shit:

[Mom]

Best of luck to you. 680- fuck that shit to hell. I'll look after your dogs for a while if you end up in dire straits.

Nice offer, so now all bases are covered, you can look after his dogs I can look after them. Hell of a commute from here though :pinch:

[tri boy]

Real estate and rentals in NZ are in a hell of a state right now.
If NZ isn't forward thinking re land and housing, we could easily be slipping further down the first world ladder. I hate real estate agents with a passion.
MHO

PS. Never deal with Ray White for either a rental or property purchace. It is the shoddiest company I have ever had the displeasure to deal with.

[The Stranger]

Can't have the poor tenants paying the evil landlords heaps huh? It wasn't THAT profitable as it was...

The tenants are muuuuuch better off now...

/sarcasm

Yeah, I really couldn't get that.
I noted 2 issues at the time the change was mooted.
1) 35% of our housing stock is rental. Fucking with that (and getting it wrong) has dire consequences for a lot of people.
2) The tax break was a neat and effective way of subsidising those those that can least afford housing. Removal of this was only going to result in one thing. Landlords seeking to recover cost from the tenant.

Oh well, what would I know? Perhaps user pays is actually a better system?

Ok, another prediction.
It's (rental prices) going to get a fuck site worse loooonnnng before it gets any better.
1) Banks have cracked down on lending, so buying is difficult. More people renting.
2) Demand for rental as a result of earthquakes is increasing.
3) Building product prices have increased already in response to Christchurch much of it 10-15%.
4) Japan will take what it needs to rebuild. Think milk - if Japan pays (say) $10.00 a meter for 4x2 guess what we will be paying? That's right $10.00 a meter. 10-15% materials cost increases are just the beginning.
5) As a result of this all of this FA new houses will be being built in Auckland - or anywhere other than Christchurch for a few years.

Inflation
Is going to take off.
The money supply is about to expand. EQC, re-insurance, RWC and dairy exports are going to add to the money supply.
Companies rebuilding Chch are going to be making money.
Tradesmen are going to be employed and demand will drive wages up (in time).
The cost of building in terms of both materials and labour is going to increase significantly.

House affordability will suffer significantly even from where it is now - placing more demand on rental accommodation.

What does this mean?
Well 5yrs from now a $400,000.00 house will be worth $500,000.00 (this is NOT unprecedented in our history and it could well be more) AND for most of that 5yrs we will see a comparatively unusual situation where rent will cover the cost of a mortgage (then some).
i.e. If one were to buy a $400k house now it will cost say $30k PA in interest assuming one were to borrow the lot (allowing for interest rate increases which will come as the RB try in vane to reign in inflation) and rents will be at or about $35k PA.

If you can, buy now. If you can't, prey.


Oh there's cheap Fazer on trademe now if anyone's interested. I need the funds to buy another property.

PS. these are the idle musings of an old fool who doesn't know shit from clay so please seek the advice of your financial adviser so he/she can sell you shares instead. I hear shares in TEPCO are cheap right now - could be a good time to buy?

[steve_t]

A mate and his wife were renting in Sandringham for $660 a week. The landlord told them rent was going up to $690 so they decided they'd look for somewhere else. He just spotted the place on trademe for $820 a week! :shit: He reckons it's to target people who want somewhere for RWC

[Gremlin]

Stranger, you're on the wrong site to be making so much sense, but yes, when I saw the initial news (and I don't own a property) I immediately thought, "Well, if I was a landlord and my costs went up, I'd put my prices up".

It beggars belief TPTB could not see this.

[awayatc]

we own a house in Christchurch (undamaged in top central location)
which we rent out....
we do not make money on the deal....
Just sort of hanging on to our family home,
en renting ourselves in different city
Demand for rental property in Chritchurch is very high as well,
we haven't even considered putting up the rent.
makig money is one thing..
living with yourself quite another.
everybody has choices, and decisions to make......
Shame to hear greed is taking over....
good places must still be around,
hope you find one.......

[The Stranger]

Stranger, you're on the wrong site to be making so much sense, but yes, when I saw the initial news (and I don't own a property) I immediately thought, "Well, if I was a landlord and my costs went up, I'd put my prices up".

It beggars belief TPTB could not see this.

Of course most of those rooting for the change were under some illusion that the landlord actually got a tax break for depreciation.
It was only ever a loan. Sure landlord could claim depreciation, but it's clawed back on sale. So if Fred sold his rental he then owed the IRD for all depreciation claimed.
The landlord gained affordability, but not profit at the expense of the taxpayer so in reality it didn't even amount to a subsidy.

[aprilia_RS250]

Problem is that we have two dogs and the current market is such that anything half decent seems to be turning into a bidding war amongst non-dog-owning tenants.

Hey man, I live with two dogs at the moment, it's horrible. I used to live with hot girls and it was sooooo much better. Walking around in underwear was the norm, now I have to look at the cottage cheese. Anyway North Shore is pretty good, especially for suburbs that have ferry terminals....

[Squiggles]

We're paying the mortgage on a property the olds bought when we couldn't find a place to rent (Who rents to a bunch of bikie students??? 2 months of searching and we didn't even get close)

[Brett]

Yeah, I really couldn't get that.
I noted 2 issues at the time the change was mooted.
1) 35% of our housing stock is rental. Fucking with that (and getting it wrong) has dire consequences for a lot of people.
2) The tax break was a neat and effective way of subsidising those those that can least afford housing. Removal of this was only going to result in one thing. Landlords seeking to recover cost from the tenant.

Oh well, what would I know? Perhaps user pays is actually a better system?

Ok, another prediction.
It's (rental prices) going to get a fuck site worse loooonnnng before it gets any better.
1) Banks have cracked down on lending, so buying is difficult. More people renting.
2) Demand for rental as a result of earthquakes is increasing.
3) Building product prices have increased already in response to Christchurch much of it 10-15%.
4) Japan will take what it needs to rebuild. Think milk - if Japan pays (say) $10.00 a meter for 4x2 guess what we will be paying? That's right $10.00 a meter. 10-15% materials cost increases are just the beginning.
5) As a result of this all of this FA new houses will be being built in Auckland - or anywhere other than Christchurch for a few years.

Inflation
Is going to take off.
The money supply is about to expand. EQC, re-insurance, RWC and dairy exports are going to add to the money supply.
Companies rebuilding Chch are going to be making money.
Tradesmen are going to be employed and demand will drive wages up (in time).
The cost of building in terms of both materials and labour is going to increase significantly.

House affordability will suffer significantly even from where it is now - placing more demand on rental accommodation.

What does this mean?
Well 5yrs from now a $400,000.00 house will be worth $500,000.00 (this is NOT unprecedented in our history and it could well be more) AND for most of that 5yrs we will see a comparatively unusual situation where rent will cover the cost of a mortgage (then some).
i.e. If one were to buy a $400k house now it will cost say $30k PA in interest assuming one were to borrow the lot (allowing for interest rate increases which will come as the RB try in vane to reign in inflation) and rents will be at or about $35k PA.

If you can, buy now. If you can't, prey.




Couldn't agree more. Those with cash and cashflow have numerous opportunities on their hands. Those with access to cheap construction even more so. Those with neither, well good luck to them getting a house anytime soon. Comes back to productivity ultimately, increase our productivity, businesses make more money which ups incomes allowing income/house price ratio to be much more favourable to new home buyers.

[Jantar]

$660 pw is $34320 pa. That would repay a $500000 mortage. So why would anyone rent at those prices?

[Gremlin]

Because banks won't lend half a mil to just anyone. You also need more proof of job etc, to get half a mil, as opposed to renting on somewhat of a month by month basis.

[JimO]

compare these rents......http://www.trademe.co.nz/property/residential-property-to-rent/otago/dunedin

[Flip]

$660 pw is $34320 pa. That would repay a $500000 mortage. So why would anyone rent at those prices?

You also need a 50k deposit, which is a bit of a hurdle at the best of times, also the banks don't like lending more than 1/3 of the gross income.

[Ocean1]

What does this mean, do we suppose?

http://www.stuff.co.nz/business/industries/4839707/Unsold-home-figures-soar

[Usarka]

Housing market is tanking except for main centres, especially auckland. Aucklands main problem is excess demand / low supply for immigration, returning ex-pats, and organic growth.

Soultion: Export all the beneficiaries to Tokoroa.

[Flip]

What does this mean, do we suppose?

http://www.stuff.co.nz/business/industries/4839707/Unsold-home-figures-soar

The house sale figures are usually delayed because houses are sold by contract but are not reported until after the sale date. Rentals are reported immediately.

Every house around me that was on the market has been sold and the local real estate window is almost empty.

[Ocean1]

Housing market is tanking except for main centres, especially auckland.

Yes. Good quality stuff at the mid-high range is still moving based on cashed up buyers. The rest is overpriced, vendors not prepared to accept the drop in value of their property.


Soultion: Export all the beneficiaries to Tokoroa.

Excellent idea.

[wysper]

$660 pw is $34320 pa. That would repay a $500000 mortage. So why would anyone rent at those prices?

Cos me with a young family can't seem to find 100k deposit.
Even though the I am told I am earning heaps, I can't even afford kiwisaver.
We are trimming our weekly shopping budget, we don't go out. We don't have holidays.

No spare money to start saving for a deposit. We are f*cked (at least in the looking to buy a home stakes). And there are many worse off than us.

[yachtie10]

Stranger, you're on the wrong site to be making so much sense, but yes, when I saw the initial news (and I don't own a property) I immediately thought, "Well, if I was a landlord and my costs went up, I'd put my prices up".

It beggars belief TPTB could not see this.

stranger make some sense but rental prices just like house perices are set by the market Landords can only put the price up if someone will (and can) pay it.
The tax changes are fairly irrelevant. also most landlords are not going to sell in a bad market unless they get a good price (assuming they dont have to sell)

[Brett]

For those struggling to get the cash together for the deposit, rent to buy options (by folk who are not complete sharks just looking to screw you over for profit) may be something to consider.

[Smifffy]

Housing market is tanking except for main centres, especially auckland. Aucklands main problem is excess demand / low supply for immigration, returning ex-pats, and organic growth.

Soultion: Export all the beneficiaries to Tokoroa.

Yeah we do have a few beneficiaries here already. Some of them even drive BMWs and clubsports. Export a few more here, and keep complaining about the price of rents, the traffic, the cost of houses, the lack of public transport, the new supercouncil, the RWC etc in the big smoke.

:sunny::violin:

[Jantar]

You also need a 50k deposit, which is a bit of a hurdle at the best of times, also the banks don't like lending more than 1/3 of the gross income.
No deposit needed for a first home. http://www.welcomehomeloan.co.nz/

[Madness]

stranger make some sense but rental prices just like house perices are set by the market Landords can only put the price up if someone will (and can) pay it.
The tax changes are fairly irrelevant. also most landlords are not going to sell in a bad market unless they get a good price (assuming they dont have to sell)

It's not neccesarily the asking prices for decent rental properties making it hard to find a home. There seems to be a lot of examples currently where prospective tenants are bidding above the asking price for a rental simply to secure it over the masses of applicants. Demand has exceed supply for too long. That said, there have been a few properties we've seen that will allow our dogs, they're generally over $650 p/wk though, which we can't afford.

There also seems to be a high number of rentals listed that are on the market for sale and for rent only on periodic tenancy. If you're like us and keep having to move due to changes in the landlords circumstances every year or so, rather than our own then this isn't a very attractive proposition.

Still looking, fingers crossed for one in particular. If we get this one I might just have to run down the street naked to celebrate :yes:


No deposit needed for a first home. http://www.welcomehomeloan.co.nz/

We applied for a Welcome Home Loan two years ago and got it approved. We then found that for the $250,000 we had to play with we could only afford houses in suburbs such as Otara that weren't very nice. Call me a fucking snob but I'd rather rent thanks.

[The Stranger]

stranger make some sense but rental prices just like house perices are set by the market Landords can only put the price up if someone will (and can) pay it.
The tax changes are fairly irrelevant. also most landlords are not going to sell in a bad market unless they get a good price (assuming they dont have to sell)

If there comes a time where an activity becomes too onerous or expensive or not profitable you don't stay doing it as is, you try and change something. The most likely outcome is to try and increase prices. Whilst on an individual basis this would be difficult, if everyone is doing that (the changes did affect everyone in the residential rental market) it effectively becomes as a monopoly.
Given accommodation is a necessity, it makes it rather difficult for the consumer to say nah, no thanks, I'll live under that bridge instead.

Not sure what exactly you are driving at re selling in a bad market, however who would enter a bad market? There are always those that will be exiting for one reason or another (myself) so you do need a stream of new entrants to balance that.

[retro asian]

Our rental went on the market, and the first person to view it placed an offer... with a baby arriving very soon, we decided to give our notice ASAP instead of getting the 6 weeks...as we'd rather move before the birth not straight after it.

Looking intensely over a week or so, we found a small apartment in the city... priced at over $50 more than we pay for our current place, and a big downgrade from where we have to move out of! However it was a great deal in comparison to most other options we saw.

Going to the viewing, it was quite disheartening to see ten groups of people also there, most desperate for somewhere to live. It was like a Mexican standoff while everyone stared each other down, waiting for the agent to come.

I listened in as someone asked her what the ideal requirements were for this place. She said the owner wanted a 12 month fixed contract, and someone who could move in immediately. Armed with this information and a well written sob story about how we were desperate to find a warm home for baby's arrival I submitted our application.

Amazingly the next day we were the top choice out of 8 applications!!

I really feel for everyone who's out there looking. Try asking the rental agent what the ideal candidate needs to bring to the table. Hope that helps!

[Madness]

Sorted. Should be signing tomorrow, hopefully for a 2 year fixed term. Moving from the far east to the far west and from a small village community to suburbia. Still, a nice house with a fenced section and an alarmed double gargre. It's not the one we were hoping for so I won't be cavorting in the nude to celebrate :sweatdrop:

The house was listed thismorning and there were 10 families that had applied for it by 6pm. Thank christ they were all as poor as, or poorer than me :drinkup:

Thanks for the good wishes and support :woohoo:

[steve_t]

Sorted. Should be signing tomorrow, hopefully for a 2 year fixed term. Moving from the far east to the far west and from a small village community to suburbia. Still, a nice house with a fenced section and an alarmed double gargre. It's not the one we were hoping for so I won't be cavorting in the nude to celebrate :sweatdrop:

The house was listed thismorning and there were 10 families that had applied for it by 6pm. Thank christ they were all as poor as, or poorer than me :drinkup:

Thanks for the good wishes and support :woohoo:

Sweet. Good luck with getting it. Hope you're getting a good rate. My floating rate just went down 0.5% today - about bloody frickin time cos the OCR went down ages ago