Rents in Wellington stall
Over the past few years, and despite all that Covid-19 has thrown at the population, house prices continued to rise. Rents too were on a much more pronounced upward trajectory than had previously been seen.
Some of the rent rates we have been seeing over the past twelve months have been surprisingly strong. As capital gains accrued, investors also enjoyed these climbing rents as a double bonus.
Things have changed
House prices and rents are going through a transformation right now. It’s got the potential to be a rough ride, compounded by new borrowing restrictions, debt to equity ratios, laws restricting property, building consents, new building regulations, and rapid changes in the supply and demand relationship.
New Zealand’s borders are opening and Kiwis are coming home. There are also hints that many overseas people will be eyeing New Zealand as a safe paradise in the azure oceans of the Pacific, and a trouble free environment to emigrate to. These people all need somewhere to live.
There will be a lull in the market right through March as Omicron peaks and falls like a last hurrah. Tenants will stay put due to uncertainty, first home buyers will continue battling with the CCCFA rules, and real estate in general is now a buyer’s market. Sale prices have stalled and pegged back, and activity is low at the moment.
Winter is Coming
As we sail into winter, the rental market traditionally settles down. Many rental owners have rent rate expectations that are now on the high side. This is a time to be realistic about the returns on your investment. Promises of ever lifting rents and sky high appraisals are not the current reality now.
If you want to find out what rent rate you can reasonably expect in the current environment, book yourself a Market Rental Appraisal with one of our Property Managers now. It’s free and could help you to strengthen your property investment strategy.