Kiwis abroad are flooding back into the country amid the Covid-19 world crisis, wanting to live in the safe haven New Zealand has created. But what does this mean for the rental property market?
It's estimated around one million Kiwis live abroad. Since New Zealand entered alert level 4 on 25th March, just over 23,000 have returned, and counting. On top of that, data from Statistics NZ shows a further 9000 people on other passports (most of them residents) have also arrived in the country in this time. In comparison, just over 9600 New Zealanders have left the country.
Most of these arrivals will be migrating towards economic centers, like Wellington, to start work, and of course they will be wanting to find somewhere to live. Wellington is also increasingly attractive because of all the "safe" industries for employment on offer, such as the government sector.
Already there is a low supply of rental properties available in Wellington, causing rents to rise year after year. Over the past 10 years, the mean rent in Wellington has grown from $351 to $517, showing a 3.95% Compound Annual Growth Rate.
This sudden push to not travel internationally and surge in kiwis returning to the capital will continue to rise. Even real estate companies are noticing a surge, with overseas online enquiries increasing from 10% to 25%.
So what does this mean? There will be more people looking, but the same amount of properties available, meaning rent values will likely surge again soon, and tenants will find it even more difficult to find properties, particularly during the high demand Summer period. The only solution is creating more supply, but at the rate new developments are being built, supply is unlikely to catch up.
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