The Nelson rental market varies through the seasons
After writing the pessimistic comments about the Nelson rental market in the July newsletter I do hope Nelson landlords are not heading for the hills. Talking of hills I have just returned from another of my regular adventures overseas hiking the mountains of France. It is amazing what two weeks away from the daily grind can do for one’s outlook on life. Of course most people would take a longer holiday but my claim is, it is the intensity of the holiday not its length that counts.
Anyway, my absence seems to have done the market some good. Nelson’s adverts on TradeMe have dropped from 210 to 190 and Tasman’s from 98 to 84. Sure small stuff but several property managers have already noticed the change. That is 14% for both areas. Let’s hope the trend continues and we return to a traditional buoyant summer market. The down side of increased tenant optimism to encourage them to take up new rentals is there are more tenants giving notice.
My comments about Auckland’s reported rental shortage being imaginary have now been picked up by the likes of Olly Newland who is lamenting the lack of rent growth in Auckland and saying this is because of an oversupply of apartments. As usual he is partially right but of course everyone knows that an apartment in Central Auckland has about as much influence on a three bedroom price in Papakura as it does on a property in Stoke.
Now Auckland’s adverts have gone down over the month by 200 which is a miserable 3% and Otago’s up by 412 a massive 46% jump in advertisements. There are going to be some desperate landlords down there. The statistics indicate that there has been a jump of about 10,000 house sales around the country over the same time last year whilst at the same time there have been a suspiciously similar number of people withdrawing their Kiwi Saver deposits to buy a first home.
Just tonight I had a young butcher tenant ring to say he has purchased his first home. He had savings of $15000 in Kiwi saver and will be getting another $5000 from HNZ being $1000 for every year he has been in the scheme. With the flagged change of deposit requirements it is pretty easy to see which buyers that will affect the most.
Property investors will of course be unaffected by deposit changes. So good times are about to return for our market because there will be less people exiting the rental market and buying their first home. I personally think the social harm caused by these stupid flip moves by the Government and the central bank outweighs the financial gains us landlords will make. But you and I cannot make our voices heard so we might as well harvest whilst the sun is out.
Glenn Morris is the owner of Nelson property management company, “Glenn’s Vacancies”, managing residential and commercial investments. He is the current secretary of the Nelson Property Investors Association. He was active in the review of the RTA and is a well-known figure in the property investment community. He has a reputation for effectively managing difficult tenancies.”
