Rental crisis: Situation 'terrible' in Gisborne

Just four rentals listed on Trade Me yesterday

Just four rentals listed on Trade Me yesterday

File picture

Even the national body representing property investors is shocked at the “terrible” state of Gisborne’s rental market, with less than a handful of houses.

Trade Me website yesterday had just four rental vacancies listed in central Gisborne, two of which had only one bedroom.

“There is definitely a shortage of properties and a huge demand,” Gisborne letting agent Emma Brown said.

“Over the past year or so we have seen a lot of people from out of town finding Gisborne to be a great place to live and work, and making the move here from the larger cities.

“We have seen a number of our investment properties selling due to legislation changes, which are making things harder on landlords.

“The upside of this is that a lot of these properties are selling to local first-home buyers through KiwiSaver. “We are seeing rents increasing steadily so expect to see more investors return to the market, which will in turn increase the number of properties on offer.”

Tenancy data from the Ministry of Business, Innovation and Employment shows the number of active rental bonds in Gisborne last month fell to 3156 — 33 fewer than in December 2017.

Simultaneously, the average mean rent in the district rose from $287 a week to $332.

New Zealand Property Investors’ Federation president Sharon Cullwick said the situation in Gisborne showed what happened when the Government “puts the squeeze on landlords”.

“I didn’t realise the situation was so bad in Gisborne — it’s terrible.

“It’s amazing but I suppose that’s what happens when they start putting the squeeze on landlords to make it better for tenants. It’s a good thing but ultimately it means more landlords are not getting into the market, and more of them are now taking the opportunity to leave.”

While the average age for landlords was over 55, many of those were looking at exiting the market because it was becoming too hard to keep up with costs through new government regulations.

'It is hard to see a solution'

Cullwick said it was hard to see a solution.

“I guess because there are so many more regulations on landlords, landlords have decided to exit in favour of first-time buyers.”

However, that brought its own issues for renters and housing stocks.

“We know for every first-time buyer of a house, it takes two houses to house all the tenants because there are more people who live in a rental house than would do so in an owner-occupied house.

“I don’t know what we can do because we can’t build houses quickly enough.

“The Government really does have to lay off landlords. They need landlords to provide housing because the Government can’t buy enough housing. It’s also cheaper for a landlord to own a house than for the Government to own a rental property.

“They shouldn’t be so hard on landlords if they want landlords to help them out.

“ If they don’t, there will be more people who end up being unable to find rental properties and end up living on the street.”

Home Rental Services managing director Graham Faulkner said the situation was the worst he had seen.

“We had two properties available and both had been de-listed this morning, and that leaves us with nothing.

“It was nearly as bad as this a year ago but then it recovered after the Christmas break, but this year it has not.

“The biggest problem is the lack of the cheaper, more ordinary three-bedroom-type family homes that used to be out there in reasonable numbers up until about three years ago.

“They are just not available now.”

There were a “whole range” of issues behind the lack of houses, including Gisborne’s increasing population.

“Almost every day I am seeing new people coming in, or people coming back to Gisborne who have been out of Gisborne for years, and that’s just adding and adding to the shortage.”

Even the national body representing property investors is shocked at the “terrible” state of Gisborne’s rental market, with less than a handful of houses.

Trade Me website yesterday had just four rental vacancies listed in central Gisborne, two of which had only one bedroom.

“There is definitely a shortage of properties and a huge demand,” Gisborne letting agent Emma Brown said.

“Over the past year or so we have seen a lot of people from out of town finding Gisborne to be a great place to live and work, and making the move here from the larger cities.

“We have seen a number of our investment properties selling due to legislation changes, which are making things harder on landlords.

“The upside of this is that a lot of these properties are selling to local first-home buyers through KiwiSaver. “We are seeing rents increasing steadily so expect to see more investors return to the market, which will in turn increase the number of properties on offer.”

Tenancy data from the Ministry of Business, Innovation and Employment shows the number of active rental bonds in Gisborne last month fell to 3156 — 33 fewer than in December 2017.

Simultaneously, the average mean rent in the district rose from $287 a week to $332.

New Zealand Property Investors’ Federation president Sharon Cullwick said the situation in Gisborne showed what happened when the Government “puts the squeeze on landlords”.

“I didn’t realise the situation was so bad in Gisborne — it’s terrible.

“It’s amazing but I suppose that’s what happens when they start putting the squeeze on landlords to make it better for tenants. It’s a good thing but ultimately it means more landlords are not getting into the market, and more of them are now taking the opportunity to leave.”

While the average age for landlords was over 55, many of those were looking at exiting the market because it was becoming too hard to keep up with costs through new government regulations.

'It is hard to see a solution'

Cullwick said it was hard to see a solution.

“I guess because there are so many more regulations on landlords, landlords have decided to exit in favour of first-time buyers.”

However, that brought its own issues for renters and housing stocks.

“We know for every first-time buyer of a house, it takes two houses to house all the tenants because there are more people who live in a rental house than would do so in an owner-occupied house.

“I don’t know what we can do because we can’t build houses quickly enough.

“The Government really does have to lay off landlords. They need landlords to provide housing because the Government can’t buy enough housing. It’s also cheaper for a landlord to own a house than for the Government to own a rental property.

“They shouldn’t be so hard on landlords if they want landlords to help them out.

“ If they don’t, there will be more people who end up being unable to find rental properties and end up living on the street.”

Home Rental Services managing director Graham Faulkner said the situation was the worst he had seen.

“We had two properties available and both had been de-listed this morning, and that leaves us with nothing.

“It was nearly as bad as this a year ago but then it recovered after the Christmas break, but this year it has not.

“The biggest problem is the lack of the cheaper, more ordinary three-bedroom-type family homes that used to be out there in reasonable numbers up until about three years ago.

“They are just not available now.”

There were a “whole range” of issues behind the lack of houses, including Gisborne’s increasing population.

“Almost every day I am seeing new people coming in, or people coming back to Gisborne who have been out of Gisborne for years, and that’s just adding and adding to the shortage.”

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Phil - 7 months ago
It is not hard to see the solution. There are two large buildings on Gladstone Road, Grey Street intersection that are completely empty. There is a need for more one-bedroom accommodation in Gisborne. We are losing many young European tourists who would like to live here and potentially start businesses but they leave because they cannot find affordable accommodation.
Please someone, step up to the plate and build some clean and and affordable rental accommodation for potential newcomers to Gisborne.

Phil - 7 months ago
Quick comment. It has come to my attention that there is also a need in Gisborne for a model and hobby shop, a kite shop, and an electronics shop (components like diodes, transistors etc). These are good hobbies for young people.

P.s. I have seen tall apartment blocks in Brazil with exterior green walls. They look beautiful and create that balance of nature and urbanity. Imagine those two previously mentioned buildings on the corner of Gladstone and Grey street as (affordable) apartments with large hanging gardens growing down the sides.

P.P.s. They have to be affordable or the young people with new ideas get into debt and new ideas never come to fruition.

Tee - 7 months ago
It's pretty sad. I am a gizzy local born and bred living in a small three-bedroom house with my four kids, two of them teenagers. We have no fence and no shed, no backyard and share a driveway with the neighbours. The lack of fencing is most serious as I have two under 2. Finding a bigger house is so hard, so we've had to make do with what we have and hope the housing situation is going to be better in the next few months. My rent is $320 a week I am willing to pay an extra $40 a week for a shed and fenced house, so I can feel my kids can play safely outside without the risk of being hurt by cars.

Deanna - 7 months ago
I've been thinking of renting my house out. The reason I haven't is I'm scared it won't be looked after . . . And we have a pool which needs upkeep . . . Would tenants keep it maintained?

Fee - 7 months ago
Landlords and land agents are too greedy.
Money-hungry bloodsuckers.

Dee - 6 months ago
Deanna may we chat? I see it has been 27 days since you commented but I'm hoping you see this.

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