As we approach the beginning of the Summer season, we'd like to share what we're seeing in the market and offer some guidance on what may come in the next year.
In the past 3 years we've seen more changes to the laws affecting rental properties than ever before, and we've all been working very hard to keep ahead of all the requirements for insulation, new tenancy law, insurance, Healthy Homes Standards, and then tenancy laws once again. We have been generally supportive of many of the changes, as they have reflected what we're already doing and what we considered good business practice.
So, what is happening in the rental market?
We're seeing rents increase on average 5%, with some notable exceptions in both directions.
Why is this? Well, it's important to note rent values are linked to demand, supply, employment and income. In Wellington, demand is still strong in most areas and supply is limited. While employment and income are holding up for most people, it's not for some. Civil and many private sector employees are showing strong interest in advertised properties. However, most people employed in travel, some people in hospitality, and in some other industries or sectors that have been disproportionately affected by Covid-19, are uncertain of their immediate prospects, which affects demand and rent values.
Inner City One-Bedroom Apartments.
On the supply side there have been one-bedroom Airbnb properties coming onto the long-term rental market, and at the same time newly completed apartment blocks are being advertised. On the demand side, overseas students, who in normal years make up a significant percentage of the tenants for one-bedroom CBD apartments, are just not here.
To put some numbers around that; there were 525 properties advertised on the 9th August on Trade Me across the Wellington area. 158 of those properties are one-bedroom apartments located in the CBD. We are now seeing owners of furnished apartments removing the furniture and/or reducing the rent to non-furnished levels.
This situation will turn around, and it may be quite soon as the government is hiring, and applicants are coming from outside of Wellington. Whether that will replace the missing students and soak up the extra properties remains to be seen, so our advice to owners of Wellington CBD one-bedroom apartments is to focus on retaining the existing tenant rather than having to compete in an oversupplied market.
Homes in the suburbs
Market rents for family homes have increased on average 5% across Wellington over the past 12 months. Though certain suburbs have experienced larger increases, such as Tawa, Karori, Newtown, Hataitai, Aro Valley and Berhampore. The above average increases have been in suburbs bordering other popular suburbs that have experienced steady growth in previous years and where demand has outstripped supply.
Are you getting the best potential from your rental?
It's important to make sure you get the best rent from your investment. In alignment with tenancy laws, we complete regular rent reviews every 12 months, providing Quinovic clients advice specific to their investment.
Arranging a rental appraisal with us gives you access to our market knowledge, rent data, and understanding of market trends, matching your property and it's features with the right rent for the current market. Get in touch today to arrange a free rental appraisal. At Quinovic our appraisals are free of charge.
Quinovic Johnsonville | Wellington
Call Jordan Atkinson - 027 297 0873
Quinovic Hutt Valley | Wellington
Call Helen Vance - 027 487 8103
Quinovic Kent Terrace | Wellington
Call Jordan Atkinson - 027 297 0873
Quinovic Wellington Property Managers