Bay second-most expensive place to rent

The Bay of Plenty is the second-most expensive region to rent in, equal with Wellington. File photo.

Median weekly rents have increased in the Bay of Plenty by $25, bringing the region up to the national average of $450 – and making it the second-most expensive region to rent in.

Despite the rise, though, some landlords are struggling with increasing costs of their own.

Head of Trade Me Property Nigel Jeffries says rents in the Bay of Plenty have ‘kicked back into gear' after a winter hibernation.

'Landlords will have plenty to smile about with rents in the Bay of Plenty jumping $25 in September, back up to $450.

"This region has seen rent demand change drastically in the last few years as the Auckland property market has gone crazy. The Bay of Plenty is once again level with Wellington as our second most expensive region.

"When we look back over the last five years of rents in the Bay of Plenty, we can see just how much the rental market has changed. Rents are now 50 per cent higher than they were in 2012 and 40 per cent of that change has been in the last three years. Compared to September 2012, tenants are paying $7800 more a year in rent.”

However, Tauranga Property Investors Association president Simon Darmody says $25 a week would not cover the increased costs for property owners over the last year.

'Property owners face a number of increasing costs like insurance and rates, but also the potential of increasing compliance costs and repairing damage to properties from tenants.

'Like any other business landlords need to make money from their properties to remain in business. If landlords sell up or stop spending money on their properties, there will be the flow on effects on all of the associated service companies and trades like builders, property managers, painters, gardeners, maintenance companies, along with a reduced number of rental properties available for renters.

'If everyone wants to own their own house this may be fine - but it could make it more difficult for anyone who chooses to rent.”

During the election campaign, Labour promised to stop landlords evicting tenants without good reason, as well as extending notice periods to 90 days, if elected to government. Now they have formed a coalition with New Zealand First, Simon says investors are thinking twice about rentals.

'A number of investors I have talked to recently are looking at exiting the New Zealand residential rental property market due to political intervention and the uncertainty this creates, with some choosing to invest overseas or moving into the commercial property sector.”

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2 comments

Landlords

Posted on 24-10-2017 13:12 | By MISS ADVENTURE

Yes, the rent increases are not keeping up with the costs, examples: - Insurances are up 50% in the last two years alone, part of that is the government based levies like the fire service and EQC. Rates and water costs are up a lot to, perhaps in the realm of 35-40%. The average Tenants are harder on houses than the average owner occupier. Getting insurance for P infected houses is virtually impossible now so all that cost and risk falls on the landlord not the tenants who just walk away "ops I didnt do it... it was accidently happened .... walk-away". Current issues like the standard for a tenant house insulation (usually requiring rectro-fit (very costly) also adds to teh increased costs burden to a landlord. Ironically some older houses (better built than many more recently) are not worth the cost to refit. so get sold for owner occupier


Landlords #2

Posted on 24-10-2017 13:16 | By MISS ADVENTURE

So once you add all that up more costs on the landlord, less responsibility on tenants then obviously landlords will think twice about owning a rental. The results are: - loss of perfectly good houses from teh rental market when there is a shortage already. Also obvious is what then happens to the price (the rents) they rise reflecting all the above. As is typical, you want all the "nice to haves" then sooner or later consumers pay the bills, it would be completely naive to think otherwise.


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