BusinessDesk report by Sophie Jackman
The supply of rental properties nationwide continues to outpace demand, Trade Me Property reported today in their analysis of 2012’s final quarter. However, the property listing service suggested some potential home buyers may be driven into the rental market as the supply of properties for sale flattens out.
Trade Me Property compares the numbers of properties listed on its site against the average number of email enquiries per listing to measure supply and demand.
Rental listings increased by 8 per cent year-on-year, while demand for these properties decreased by 5 per cent, continuing the trend observed in the September quarter.
Average asking rents rose by 3 per cent nationwide. Excluding Canterbury, a 1 per cent nationwide increase was recorded.
Trade Me Property head Brendon Skipper said conditions resembled those in the last rental boom, with landlords’ yields in decline — particularly in Auckland — due to flat rents being unable to match rising house prices. He expected landlords outside Christchurch to further reduce asking rents to capture tenants after the New Year break, except for those with properties aimed at students, who would exhibit a reliable demand for flats before university terms got underway.
Home buyers meanwhile were competing for properties, with demand up 13 per cent year-on-year while listings were flat. Skipper said this could push buyers into the rental market.
“Auckland is one to continue to keep an eye on here — there is nothing to suggest prices will abate any time soon,” he said.
Auckland’s average house prices rose by 7.7 per cent in 2012 compared to the previous year, reported Barfoot & Thompson last Tuesday. The real estate company said both new listings and total listings in the city had reached record lows. December 2012 marked the first month in a decade the company had listed fewer Auckland homes than it had sold.
The November 2012 ASB Housing Confidence Survey reported buyers’ confidence in the Auckland housing market fell steadily over the year to a low of 8 per cent, at odds with those in the rest of New Zealand who increasingly considered it a good time to buy.