Shortage to push up rent
By Andrea Milner
4:00 AM Sunday Dec 20, 2009

An undersupply of housing is about to push up rents, a report says.

BIS Shrapnel's latest analysis forecasts rents in New Zealand will mirror the rise of nearly 6 per cent predicted for Australia over the next three years.

"It's obvious there is going to be similar growth in New Zealand," says BIS Shrapnel spokesman David Dragicevich.

"You have got a low level of construction, record net migration of 26,000 next year - inevitably this will result in tighter rental markets and an increase in rents."

And the situation is expected to worsen. Construction has been crippled by decreased developer financial resources, and over the next year only 8600 homes will be built in the North Island, compared to an average of 14,000-15,000.

"That's a very low number," Dragicevich says, "and if investors don't enter the market at sufficient levels, the rental issue will become even more critical down the track".

More here.