We wanted to get a snapshot of the national rental market to see what affect Covid-19 has had on property owners and their rental customers. As you’d expect, it’s a mixed picture, but it seems that in some parts of the market, renters are in the driving seat with more properties available with a drop in tourism being one of the driving factors.
In Auckland, Quinovic Parnell’s Business Development Manager, Kerry Kirwan, has seen a softening in demand in certain areas of the rental market which has had a flow on effect to rents. “Since Level 3 lockdown, this has been particularly evident with CBD and inner-city apartments where demand has been low, compared with some of the outlying suburbs, particularly in the west and south, where there is still strong demand for rental accommodation”, says Kerry. “There are noticeably more fully furnished properties being advertised too, as former AirBnB properties hit the market. This is particularly prevalent in the inner city where listings of furnished properties initially increased by approximately 25%.” Kerry says it is also taking longer to find tenants, especially for CBD apartments and city fringe properties, with the time taking to rent these properties increasing by around 2-4 weeks compare to pre-Covid. “This can be attributed to a lack of foreign students and foreign workers, and fewer people currently working in the CBD looking for longer term rentals. The market is also very price sensitive,” she says. “The lack of visitors and tourists has had a major impact on rental prices for serviced apartments too, with prices initially falling by up to 40%.”
Mike Helleur, General Manager for the Wellington Kent Terrace and Johnsonville franchises, has been watching the Wellington market, and says the Covid-19 Level 4 lockdown was a time of reflection for many people “We have however noticed that the number of properties being advertised for rent has reduced by approximately 18% in July, and the number of enquiries from people looking to rent properties through our franchise doubled in June over the previous three months”. He says regional Wellington has weathered the storm, mainly thanks to a high number of people working in government jobs. “We noticed a small number of requests for rental payment reductions from rental customers. This reflects, in part, the early advice and assistance from the government, which we quickly communicated to owners and rental customers”. However, Mike acknowledges that there is still a long way to go before Covid and its economic impacts can be put behind us. “The reality and the effects of Covid-19 are still to be fully realised and will become more apparent when the government subsidies are finished,” he says. “As property managers, we need to be prepared to respond to an evolving situation and we will continue to work closely with our owners and rental customers”.
In Christchurch, Tessa Keeling heads up Quinovic’s office in Riccarton, and says lots of people are moving between properties, which is an unusual trend for the winter months. “It is probably due to the backlog created during the lockdown,” says Tessa, while also noting that “there has been a 20% to 30% increase in investor client enquiries, which could be a reflection of Covid-19 or the changes to the Residential Tenancies Act, which has recently been enacted”. Looking at the rental market, pre and post Covid, Tessa is also mindful of the potential impact of the end of the government’s wages subsidies and of the need to ensure that there continues to be open and clear communication with owners and rental customers.
Right now, could be termed the eye of the storm with the fallout of the tourism market yet to really bite this summer, the end of wage subsidies, and a changing landscape across the retail sector as more people shop from their armchairs. Covid-19 impact on property owners and their rental customers