The number of available Christchurch rental properties has been down by as much as 400 homes in recent months. So, what factors have contributed to this supply shortage and what does it mean for landlords and tenants?
Christchurch rental property shortage by the numbers
There are usually around 1200–1300 available houses to rent in Christchurch City, but this figure was down to around 860 properties throughout June and into July. Recent months have been a real pressure cooker for tenants looking to rent in Christchurch, with availability down and rental prices going north.
What’s driving the rental property shortage in Christchurch?
There is no single reason the garden city’s rental supply is the lowest it’s been since immediately following the earthquakes — when as few as 500 properties were available. Rather there are multiple contributing factors combining to weaken the Christchurch rental property supply and increase demand.
1. COVID-19
With the effects of the COVID-19 pandemic still playing out globally, a high volume of expat New Zealanders have been moving back to Aotearoa to start a new life on home soil. This increases demand as the pool of renters grows.
Some of these returnees are heading into the main centres while others are seeking the slower pace offered by the provinces.
To boot, COVID has obliterated the rate of young Kiwis leaving our shores for their OE, along with work-related relocations at any age — putting additional strain on our nationwide supply of rental properties.
2. Healthy Homes Standards
The approach to the Healthy Homes Standards (HHS) deadline of 1 July 2021 deadline applied pressure to the number of rental properties available in Christchurch.
Since 1 July 2021, private landlords have had to get their rental properties HHS-compliant within 90 days of a new or renewed tenancy.
Inspection companies have reported low HHS pass rates in many regions, which when coupled with slowed appliance and tradespeople supply has meant remedial work to meet HHS has been hindered, negatively impacting rental stock availability.
3. Real estate sales are healthy
A buoyant real estate market (with low interest rates and high prices), HHS, and different operating conditions brought on by the Residential Tenancies Amendment Bill have seen an increasing number of landlords selling their portfolios — particularly retirees.
We discussed whether this was the right move in our Should I sell my investment property blog. In any case, when these rental properties are sold to owner-occupiers, it removes them from the rental supply.
In June, Canterbury-wide house sales were up from 952 to 1,026, an increase of +7.8% and the highest number we’ve seen for a June month in 15 years. This has contributed to a -48.5% drop in Canterbury-wide rental inventory levels, down from 2,773 to 1,428.
What does the low rental supply mean for landlords and tenants?
The lower supply of Christchurch rental properties has driven rental prices up, as demand and competition has ramped up and landlords have been able to ask more for their vacant listings. It’s arguably a great time to own an investment property in Christchurch.
On the flipside, it’s not a great time to be a tenant looking for a rental property in Christchurch. An unfortunate effect of the factors outlined above is that renters are tending to stay in their tenancies for longer, further depleting rental availability in Christchurch.
Get in touch for more
If you’re a tenant seeking a quality Christchurch rental property, check out our available listings.
If you’re a landlord, read about our reliable property management services in Christchurch and get in touch for a free rental appraisal.