Rents may be flat at present but not for much longer, if the latest figures from Trade Me Property are anything to go by.
The website has seen a 20 per cent drop in national rental listings for the first quarter of the year, which represents more than 10,000 fewer rental listings than at the same time last year.
Wellington bucked the trend, with Trade Me listings increasing 15 per cent. But in Auckland, listings were down 27 per cent.
At the same time, the number of renters appears to be rising. Trade Me said it had seen a 24 per cent rise in email questions from renters compared with a year ago. Again, Wellington was the odd region out, with demand down 12 per cent.
Another indication that rental demand is rising comes from the Ministry of Building and Housing which said bonds had increased by 54 per cent in the past two years.
Trade Me's head of property Brendon Skipper said he predicted that rental stock would increasingly be tight in the lead-up to next month's Budget, in which tax changes have been foreshadowed for property investors. Investors "will be looking to offload properties by selling them rather than hanging on to low-yield investments that look set to become a lot less tax-efficient".
Although Trade Me figures showed rents were fairly static, Mr Skipper expected rents to rise and investors to re-enter the market.
Property Investors Federation vice-president Andrew King said that despite the three-month fall in rental listings, the situation had improved in the past four weeks.
Although listings had fallen from 12,000 in December to 8500 in March, it had since increased to 10,500.
Mr King said the reappearance of rentals could be explained by cashflow-conscious landlords having briefly put their rentals on the market and failing to sell them.
"There would be a disproportionately high number of property investors trying to sell at the moment," he said. "Maybe they've got two or three rentals and are thinking, `If I sell one now I can afford to keep the other two. But if I wait until after it's a fact, maybe there'll be a lot more on the market'."
Mr King agreed there was good demand for rental properties but he did not think the jump in bond placements necessarily meant there were more people looking to rent. He said it was possibly more an indication that turnover's increasing.
However, he did believe that the widening gap in costs between owning and renting a house was keeping more people in the rental market, and that landlords would be forced to raise rents if unfavourable tax treatment came in.
Median rents had gone up $10 a week in December, and although they had dropped back to its two-year median price of $300 a week in March, Mr King suspected the average rent had been pulled down by an "extraordinarily high" number of one-bedroom rooms being let.
"I don't think it's a true reflection of what's happening in the market and I would expect the statistics would show that they're going back up again."