It is hard to fathom that October is already here…. it will be Christmas before we know it! It’s almost unbelievable to look back and imagine that the pandemic started over two years ago – time really has flown. The rental market has changed markedly since then as well. When the borders first opened a few months ago, we had a surge in enquiries, people from Australia, the Pacific Islands and further abroad were enquiring about our properties and indicating to us that there was soon to be a huge number of people moving to New Zealand. Well, strangely enough, both the enquiry levels and the number of properties rented per month seem to have fallen back. We are still busier than we were prior to borders opening as many homeowners have opted to put their property onto the rental market instead of holding out in the sales market.
Properties are taking time to rent with most sitting on the market for at least 4-5 weeks before being occupied. Rents, however, have not decreased. The average rent on our portfolio still sits well above $710 per week; compared to this time last year when we had an average across our portfolio of around $685 per week. The only portion of the market that may not align with this is the studio and one-bedroom apartment segment. This market has been slammed with an overflow of ex-Airbnb properties and many of them are still available on the long-term rental market. This creates a bit of a dip in the movement of weekly rental pricing for these type of properties as tenants currently have a large selection to choose from and with most of them being less than a few years old, it is becoming very competitive between inner-city landlords.
However, as we climb out of winter and into the warmer months, I do believe the market will bounce back. Summer is the perfect time to look at moving. The February 2021 rental law changes removing no-cause terminations have given people more security in their rentals. People are now finally able to consider renting in New Zealand as a viable alternative to owning their own home. Because of this, I believe many people will take the opportunity to shop around and secure their next long-term rental. Personally, I believe we have another 6-7 weeks of good market activity before it will begin to quieten down for the Christmas/Summer break, which will usually last until Wellington Anniversary weekend.
Being part of Wellington’s leading real estate firm always ensures our team are up-to-date with the latest market happenings. From what we hear, first-home buyers are starting to re-enter the market, as confirmed by Tony Alexander’s most recent real estate survey. Agents across the nation are seeing more and more first homes buyers back at their open homes and mortgage advisors are now dealing with more of this type of purchaser than 3 months ago. At Tommy’s, we are seeing an increase in the number of properties sold month-on-month as well. These are both promising signs that the dip that we have had in the market may not be a long one. This is great news for investors who have been looking to offload some of their portfolio for a while but have been holding off due to market conditions. We expect to see the market continue to stabilise. Read more here: https://mortgages.co.nz/mortgages-co-nz-tony-alexander-mortgage-advisers-survey-october-2022/
In non-rental market news, you may have seen that Tommy’s have had some great success recently with the real estate portion of the business winning the country’s biggest two awards in the real estate sector: the Real Estate Institute of New Zealand (REINZ) Overall Large Residential Office of the Year 2022 and the REINZ Large Office of the Year- Highest Volume of Sales. This is a fantastic achievement and it’s awesome to be a part of the same Tommy’s team. To read more about this awesome success, click here https://www.tommys.co.nz/big-wins-for-community-minded-tommys-at-the-reinz-awards-2022/
As always, if you or someone you know has an investment property in Wellington and wants to make sure they are getting the best return, get them to get in touch with Tommy’s today.