A survey by real estate company First National New Zealand suggests more homeowners are choosing to rent their properties rather than sell them and receive a low price.
"Many sellers are choosing to rent out their properties themselves so the real size of the increase is hard to quantify but the numbers of rentals being advertised have increased markedly," said John Stewart, general manager of First National NZ.
He said that in Rotorua rental property ads had more than tripled from 70 to 220 in June.
In East Auckland and the northern suburbs of Wellington, rental prices rose 10 per cent and 16 per cent - which he said was surprising given that rents usually dropped when availability increased.
"Major newspapers are also featuring more rental ads than usual," Mr Stewart said. "While winter time is traditionally a little quieter and rental numbers can increase, our agents are saying this is more significant".
He added that migrants were "propping up pockets of the market in some areas".
"While one might conjecture on the effect increased fuel prices might have on rentals further out of towns and cities, there is no evidence of a preference to shift back to central locations yet."
First National released its survey as another national estate agency reported a middling Auckland property market last month.
Barfoot & Thompson said Auckland property prices eased 1.7 per cent on the month in June, with an average sale price of $525,316.
There were 556 transactions, well behind the 1000 sales recorded in June last year, but an improvement on the 453 April and 515 May sales recorded.
Managing director Peter Thompson said: "There is a clear pattern emerging where vendors are hesitating to list their properties for sale unless they have to.
"We recorded 1214 new listings in June, which is the lowest figure this year to date.
"Some vendors are still reluctant to meet the market in terms of price expectations but that's probably just an issue of time. Vendors who need to sell within a reasonable timeframe need to be realistic about what the market will bear at this time."
The company said its property management division reported a steady market in June, letting 610 properties during the month for an average weekly rental of $391, in line with the average to date this year.
WHEN STAYING PUT MAKES SENSE
Rowan O'Connor is one of the many New Zealanders keeping a watching brief on the housing market.
The Auckland-based owner of three rental properties said he first had his three-bedroom Langholm house on the market at $274,000.
But after dropping $20,000 from the asking price and still getting no joy, he decided to hang on to it "for the time being".
"We had some tenants in there who left it in a pretty average condition and [we] did it up really nicely," he said. "We figured it was better to sell than get tenants in to do the same thing again but it just didn't happen.
"It got to the point where it was worth more to rent rather than sell."
Mr O'Connor said he was able to increase the rent from $255 to $315 a week and is happy to keep it that way.
"We'll keep an eye on the market. I don't want to hang on to it forever but in a year or two we'll see how things are looking."comments powered by Disqus