Why Are So Many Rentals Available?
In April, 5,868 new rental listings were recorded nationwide, up 24.1 percent from the same time last year. This spike is being driven by several factors:
- Short-term rentals like holiday homes and Airbnbs are shifting into the long-term market
- Younger renters, particularly aged 18 to 25, are staying home longer or moving overseas due to the high cost of living
- A slow property sales market is leading investors to rent out properties they would have otherwise sold
- Developers who are unable to sell new builds are renting them to generate income
Landlord Sentiment: What the Data Shows
- A net 33 percent of landlords report difficulty finding a good tenant
- A year ago, a net 14 percent said it was easy
- For the first time, concern about extended vacancies is now a top three issue, alongside insurance, maintenance, and rates
What Should Landlords Do Now?
- Considering shorter or periodic lease options
- Allowing pets where possible
- Offering modest incentives like one week’s free rent or moving cost support
- Ensuring your rent matches realistic market levels
What Crockers Expects Over the Next 18 Months
Crockers’ Body Corporate Business Development Team, which works closely with developers across New Zealand, especially in Auckland, has seen a notable shift. Over the past few years, many developments have been cancelled, postponed, or paused. The development pipeline in Auckland has thinned significantly.
In fact, the 12 months to November 2024 marked a major decline in regional building consents, reaching a six-year low nationally and the weakest numbers Auckland has seen since late 2018 to 2019.
This slowdown suggests that the current rental oversupply may be temporary. With fewer new builds in the pipeline and net migration still positive, Crockers expects the rental market to tighten over the next 12 to 18 months. While immigration numbers are not as high as previous years, the trend remains upward and most new arrivals begin their time in Auckland before moving into other regions.
- Demand will start to outpace supply
- Vacancy periods will shorten
- Rental prices are likely to rise again
- The shortage of supply may persist for years, as the market takes time to catch up
