11 Sep 2023

Rapid growth in number of people looking for rentals in last six months

12:22 pm on 11 September 2023

File photo. Photo: RNZ / Nate McKinnon

A chronic shortage of residential rental stock is reaching a crisis point in Auckland, with a more than 10-fold increase in people looking for accommodation in the past six months.

Rental firm Impression Real Estate, which manages 1000 rentals in Auckland, said its data indicated the number of prospective tenants viewing each rental property had increased to 50 on average from an average of five over the past six months.

Impression Real Estate chief executive Rishabh Kapoor said the rental shortage was putting additional pressure on the inner-city property market, with a high demand for central city apartments from people who had lost their homes as a result of storms earlier in the year, along with recent migrants.

"What we have noticed is that after the recent weather events our clients have decided they no longer want to reside in properties that have large sections or are adjacent to hillsides and could be vulnerable to slips or flooding, so they are moving into the CBD - which is putting even more pressure on an already tight apartment rental market," he said.

"In addition to this new domestic pressure we have migrants coming in who are also wanting to live in the central city.

"We are also seeing others downsize from larger family homes because they can't afford to pay the mortgage with current interest rates and are selling up and wanting a rental property to live in."

Kapoor said desperate tenants were offering $50 or more a week than the listed price and some had offered bribes to property managers to secure a rental ahead of others.

He said data also indicated rental prices had increased about 5 percent over the past six months.

There had also been a 43 percent monthly increase in the number of applications to the Tenancy Tribunal to more than 2100 applications.

"The rapid growth in these two market segments has significantly increased the number of people who are new to renting and unfamiliar with current industry regulations," Kapoor said, adding the company needed more than 120 rental properties to satisfy demand.

Kapoor said more needed to be done to better inform and educate landlords as well as new tenants who were often unaware of their legal rights and responsibilities under the Residential Tenancies Act.

He said the company was using an AI chatbot to help it manage a wide range of questions for tenants and landlords, some based overseas who are unfamiliar with the legislation.

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