Here at Lodge City Rentals, February saw a continuation of the market buoyancy we experienced in January, with our team certainly putting in the hard work:
Fielded 3,381 tenant enquiries
Conducted 672 open home viewings
Processed 363 tenant applications, and
Leased 153 properties
The pressure this demand puts on the pool of available rental properties remains top-of-mind, with just 15 family homes empty and ready for tenants to move in. With the speed in which properties are being leased, these will not last long.
Plus, with the good news about the borders opening over the coming months, we’ll likely be welcoming expats and skilled workers in addition to the international students we discussed last month, all on the lookout for rental properties. Later in the blog, I’ll discuss the state of the market in more detail and what opportunities it creates for investors.
Looking at the wider economic situation we find ourselves in, inflation and its effects on the price of fuel and food is on many people’s minds (and rightly so). I was certainly alarmed to read about the increases in toilet paper prices, everyone’s favourite lockdown purchase! That aside, we are aware that with these strains on people’s budgets, paying rent may become more difficult. Rest assured, our team will be taking a proactive stance on this in terms of credit control and avoiding rent arrears.
This month has also seen the Government make meaningful steps forward in introducing regulation to the residential property management sector, with our General Manager Jason attending a recent webinar with Associate Housing Minister Hon Poto Williams. The proposed model is now open for submissions, so I’ll look to share a bit more detail about what is being covered.
I’d also like to mention – if you enjoy our monthly market updates, give Lodge City Rentals a follow on social media (Facebook, Instagram and LinkedIn) to watch Jason’s monthly videos with the latest on what we’re seeing in the market.
State of the market creates opportunities for investors
With the squeeze we’re seeing on rental property listings, historically the same would be the case for the real estate market, with properties for sale also running low. However, at the moment we are seeing the two markets diverge, with the real estate market seeing plenty of listings come to market.
With our available listing levels remaining low and our team struggling to find properties for prospective tenants, but a rise in sales listings, it spells good news for those looking to increase their investment portfolio.
We’ve seen some savvy investors taking advantage of the market conditions, purchasing multiple properties over the last couple of months which will be easily tenanted by our experienced team.
To further prove the point, you may have seen the latest story where Lodge Managing Director Jeremy O’Rourke discussed how the Omicron outbreak has created a false market, with many hunkered down and open home traffic slowing. With the borders opening, Jeremy foresees the market picking right back up again over the coming months, so we’d say it’s best to act soon.
Property management regulation: we’ve said it before, but it’s coming
I’ve discussed the regulation of the property management industry on and off over the past few years, as it’s mentioned by the Government or the media but not placed as a priority. 2022 has now seen significant movement, with a discussion paper introduced for feedback submissions due on 19 April.
It acknowledges that residential property managers play a significant role in the market, managing over 40% of New Zealand’s rental accommodation, and the current state of play presents risks to property owners, tenants and other consumers. Plus, with many industry stakeholders supporting regulation, surely that’s a reason to act now.
It looks to follow the guide set by the REAA 2008 which governs the real estate sales market, with a public register and licensing for individuals, and prescribed professional entry requirements in order to become licensed and retain said license. Continuing professional development will be included, and a Code of Conduct put in place. An audited trust account, which Lodge City Rentals already has in place, will also be a necessity.
For when things go awry, a tiered complaints system is being looked at, that could sit under the REA Disciplinary Tribunal or the Tenancy Tribunal (the former is the preference). Interestingly, this would include both company and individual penalties.
We’ve always been ‘for’
regulation, as it brings everyone in our industry under the same umbrella, playing by the same rules to create a level playing field. We hope it will serve to raise the reputation of the industry as a whole, by tackling those who are currently ‘letting the team down.’
If you have any questions about this, or want to chat through the opportunities we’re seeing for investors, feel free to give myself or Jason a call.