Trade Me Property put out their latest Rental Price Index that showed a lack of greediness by Landlords listing rental properties on their site. Auckland had no gain in median price in the last year i.e. it has remained at $450 per week.
Discussion on PropertyTalk and a follow on news item on NZHerald summed up the disparity between the median rent price of rentals listed for new tenants on Trade Me and rental rate increases of renewing/existing tenancies.
Rentals listed for new tenants are priced to attract tenants quickly says a PropertyTalk poster. While existing or renewing tenancies would show a higher median rent price. What that would be however is anyone’s guess due to the absence of statistics.
Rent increases are less to do with Landlords seeing an opportunity to win big and more to do with recouping increases in expenses e.g. rates, maintenance etc. Property management companies like Pedersens Property Management work hard to ensure a good balance found – i.e. rents increase gradually and regularly at a level that appeases all concerned. Landlords often incur the expenses in full while drip feeding the increases thereby recouping the costs over time.
Let’s also not forget private Landlords (i.e. not Housing NZ) are running a business. They are investing their hard earned cash in property to make a profit. However hiking up rents to ridiculously levels is counterproductive. If rents are too high tenants leave and a vacant rental property is losing money for the business – so of course it’s best to avoid this happening as the vacant property needs to be listed for rent again (more money going out to advertise the property) and the weekly rent rate readjusted downwards to attract new tenants.
Therefore while rents are increasing it really is counterproductive to on-a-whim hike up rents and risk losing good tenants. The Landlords that do so learn the hard way and change their practices quicksmart. It’s also worth remembering Landlords are in the business of property investment for the long game when they invest in buy and hold properties – they are not in it to make a quick buck!
This blog article was written for PropertyBlogs by Mobilize Mail.