Rents climb with demand

Quality of stock and tenants pushes up prices

Quality of stock and tenants pushes up prices

NZ Herald graphic
Turanga FM's interim station manager Matai Smith has a big weekend ahead with a live broadcast of the Tamararo Senior Competitions at Houhoupiko on Saturday. Picture supplied

HOUSE rents in Gisborne have increased, with a report by Trade Me Property claiming a massive 20 percent rise over the past year.

But Philip Searle, a Gisborne-based regional director of Real Estate Institute of New Zealand, questions Trade Me’s methodology.

“It appears the reported increase is not reflected in reality, with Property Investors’ Federation showing a 9.9 percent increase, and one substantial Gisborne portfolio showing an 8.06 percent increase in actual average weekly rents over the same period last year.”

Mr Searle said the average weekly rent in Gisborne now was $295 a week.

Home Rental Services managing director Graham Faulkner agrees with an increase of about 9 percent and says the Gisborne rental market is influenced by an increasing population, with arrivals looking at the higher end of the market while “homes at the lower end of the market don’t exist any more’’.

“These have all been sold to investors who have renovated and resold for capital gain, or have simply re-let at a higher rent to better-quality tenants.”

“Gisborne is seen as quite a haven,” said Mr Faulkner.

The population had increased by 3000 new arrivals

The population had increased by 3000 new arrivals.

They were fleeing the property market of Auckland or the ‘‘rat race” of Bay of Plenty.

Other people were returning to Gisborne or were attracted by the lifestyle.

New arrivals were buying properties that otherwise would be in the rental market.

Asked if rental prices would stop increasing, Mr Faulkner replied, “absolutely not’’.

“We are in a new era for Gisborne.”

Mr Faulkner said rental prices covered a wide spread.

A four-bedroom house in De Lautour Road could attract $350 per week, while a house “at the top end in Potae Avenue could attract $500.

An “in-between” three or four-bedroom house could cost $400 a week.

A two-bedroom house that could be rented for $280 a year ago, would cost $320 to $340 today

A two-bedroom house that could be rented for $280 a year ago, would cost $320 to $340 today.

There were landlords who asked for unrealistic rents, he said.

Bronwyn Kay property manager Steve Phillips said while demand was a lot higher than two to three years ago, he felt rental prices had levelled off recently.

This was in part due to a burst of out- of-town buyers renovating properties for the rental market.

Mr Phillips said in the past year about 40 houses had been done up by out-of-town investors and made available to tenants in Gisborne.

“Rents have gone up but in my opinion that has been reflected in demand as well as better-quality homes.

“There has been a big jump in the quality available for rent, even in the not-so-good locations.

Mr Phillips said homes were a lot cleaner and tidier now.

Interest in rentals was moderate, with around 10 to 20 e-mails for each rental listed, but only about half of those people turned up for viewings, he said.

One Gisborne couple spent six months looking for a suitable rental for their family, and the last two months they had to live in a caravan on a friend’s property until the right rental came up.

The Trade Me report said national median rents in New Zealand increased by 5.6 percent in April, compared with the same time last year, to $475, with the main cause being strong demand in the provinces.

Hawke’s Bay rentals increased by 14.3 percent and Southland by 10.2 percent, but no region matched the claimed Gisborne increase of 20 percent.

By comparison, New Zealand Property Investors’ Federation (NZPIF) has reported that Gisborne rental prices increased 9.9 percent in the year ended April 2018, from $283 to $311.

This was after increasing 4.9 percent in the year to April 2017.

HOUSE rents in Gisborne have increased, with a report by Trade Me Property claiming a massive 20 percent rise over the past year.

But Philip Searle, a Gisborne-based regional director of Real Estate Institute of New Zealand, questions Trade Me’s methodology.

“It appears the reported increase is not reflected in reality, with Property Investors’ Federation showing a 9.9 percent increase, and one substantial Gisborne portfolio showing an 8.06 percent increase in actual average weekly rents over the same period last year.”

Mr Searle said the average weekly rent in Gisborne now was $295 a week.

Home Rental Services managing director Graham Faulkner agrees with an increase of about 9 percent and says the Gisborne rental market is influenced by an increasing population, with arrivals looking at the higher end of the market while “homes at the lower end of the market don’t exist any more’’.

“These have all been sold to investors who have renovated and resold for capital gain, or have simply re-let at a higher rent to better-quality tenants.”

“Gisborne is seen as quite a haven,” said Mr Faulkner.

The population had increased by 3000 new arrivals

The population had increased by 3000 new arrivals.

They were fleeing the property market of Auckland or the ‘‘rat race” of Bay of Plenty.

Other people were returning to Gisborne or were attracted by the lifestyle.

New arrivals were buying properties that otherwise would be in the rental market.

Asked if rental prices would stop increasing, Mr Faulkner replied, “absolutely not’’.

“We are in a new era for Gisborne.”

Mr Faulkner said rental prices covered a wide spread.

A four-bedroom house in De Lautour Road could attract $350 per week, while a house “at the top end in Potae Avenue could attract $500.

An “in-between” three or four-bedroom house could cost $400 a week.

A two-bedroom house that could be rented for $280 a year ago, would cost $320 to $340 today

A two-bedroom house that could be rented for $280 a year ago, would cost $320 to $340 today.

There were landlords who asked for unrealistic rents, he said.

Bronwyn Kay property manager Steve Phillips said while demand was a lot higher than two to three years ago, he felt rental prices had levelled off recently.

This was in part due to a burst of out- of-town buyers renovating properties for the rental market.

Mr Phillips said in the past year about 40 houses had been done up by out-of-town investors and made available to tenants in Gisborne.

“Rents have gone up but in my opinion that has been reflected in demand as well as better-quality homes.

“There has been a big jump in the quality available for rent, even in the not-so-good locations.

Mr Phillips said homes were a lot cleaner and tidier now.

Interest in rentals was moderate, with around 10 to 20 e-mails for each rental listed, but only about half of those people turned up for viewings, he said.

One Gisborne couple spent six months looking for a suitable rental for their family, and the last two months they had to live in a caravan on a friend’s property until the right rental came up.

The Trade Me report said national median rents in New Zealand increased by 5.6 percent in April, compared with the same time last year, to $475, with the main cause being strong demand in the provinces.

Hawke’s Bay rentals increased by 14.3 percent and Southland by 10.2 percent, but no region matched the claimed Gisborne increase of 20 percent.

By comparison, New Zealand Property Investors’ Federation (NZPIF) has reported that Gisborne rental prices increased 9.9 percent in the year ended April 2018, from $283 to $311.

This was after increasing 4.9 percent in the year to April 2017.

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Rachel - 1 year ago
Of course this has nothing to do with Gisborne property managers manipulating supply in the market to increase profits for their employers and landlords.