Bidding wars as rentals in crisis

By | January 27, 2011

27 January, 2011

Demand for tidy, central rental properties in Auckland is reaching crisis point, with supply unable to keep up.

Listings on a top real estate site for the start of January show a 24 per cent decrease compared with the same period last year, with demand up 8 per cent.

With up to 60 people turning up to viewings, renters are resorting to extreme measures to beat the competition. Many arrive early to open homes, while others turn to bidding wars, say real estate agents.

“In terms of year on year, certainly supply is down in Auckland and particularly Auckland city,” said one leading real estate website spokesman. Supply for January was also down in the Bay of Plenty, 22 per cent; Canterbury,1 per cent; and Northland 14 per cent.

Agents are reporting that often up 30 people are turning up to open homes.

In Mt Eden, crowds of young professionals were snapping up three and four-bedroom villas for $500-$600 a week.

Agents received 90 calls about a recent listing for a two-bedroom home in Mt Eden and up to 60 people turned up to open homes for popular properties. One Auckland agent says “For some of the properties we get 100 calls a week – there’s just not enough properties.”

Keen renters are also offering more than the asking price.

“For one in Mt Eden the rent was $430 and someone offered $450. For a two-bedroom apartment in town one person offered $10 or $20 more,” she said. High numbers of Kiwis returning from overseas and new immigrants were pushing up demand for rentals.

“I think it’s also people who previously would have bought but banks require 20 per cent [deposit] now – it’s out of people’s reach.”

Housing Minister Phil Heatley said a lack of building activity was another problem, with building not keeping up with population growth.

Ref: NZ Herald