Housing now a tenant's market
5:00AM Sunday June 17, 2007
By Rebecca Lewis
Rents are failing to keep pace with surging Auckland property prices, creating fears of both rent rises and of landlords not bothering to invest in rental properties.
While property prices in the city increased 17 per cent in the 12 months to April, Crockers' latest market research shows rents for two- and three-bedroom Auckland properties rose only 4 per cent in the same period.
"The yields are decreasing - it is a serious problem," Crockers marketing manager Karen Coleman said. "More and more people are needing to rent, but there are fewer people who are able to buy in order to rent - at some point, rents may have to dramatically increase."
Serial investor and property guru Olly Newland said investors had less of an incentive to buy rental properties.
"You would only be getting about a 3 per cent return on value, which is just unacceptable.
"If people could pay double the amount of rent, it would be worth it for everyone, but of course, most people can't afford to do that."
Experts say it is unrealistic to expect rental values to keep up with property prices.
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