Rental properties hit all-time high: Bonds lodged on 384,000 places, up 15% in last seven years
The number of residential properties rented is at an all-time high, with bonds taken on more than 380,000 places lodged with the Ministry of Business, Innovation and Employment’s Tenancy Services.
In a move welcomed by Associate Housing (Public Housing) Minister Poto Williams, bonds are now lodged on 384,813 residences, up by 15 per cent on the 336,000 bonds lodged at the start of 2015.
Herald specialist multimedia journalist Chris McDowall used the service’s data to create a chart showing the steep rental property rise.
Instead of landlords stampeding to sell as they threatened in response to Government rule changes for rental properties, they are actually buying more places, although there is a slight seasonal year-end dip, mainly from tertiary student movements.
“The increase in bonds being lodged is an encouraging sign of more supply in the rental market and also, that CoreLogic’s Buyer Classification Data shows investors or landlords continue to be as active in the buying market as they were before the reforms,” Williams said.
That data showed that landlords accounted for 24 per cent of house buyers last July and 25 per cent last August.
Around 1.3 million New Zealanders rent and the latest data shows that landlords did not carry out their threats to sell after last year’s law change strengthening tenants’ rights.
Last April, a NZ Property Investors Association survey of 1719 said many would sell.
“Approximately 21 per cent of respondents would consider selling either some or all of their rental properties. About half of these would sell all of their rentals, with the other half considering selling an average of 2.45 rentals or 34 per cent of their portfolios,” that survey said.
But Williams said the law reforms represented a significant and overdue change to tenancy laws.
“Our tenancy laws now reflect the realities of the modern-day renting environment. Since the Residential Tenancies Act was passed more than 30 years ago, more New Zealanders are renting for longer or for life. The change has improved renters’ security of tenure and enables them to make their house a home, while still protecting the interests of landlords,” she said.
By law, landlords are required to lodge bonds with the state service and that money is usually a month’s rent.
Federation president Andrew King’s response to the new bond data showing rising rental numbers: “Wow, that’s surprising.”
He had not expected bond lodgements to grow during the pandemic, with so little net migration.
“It doesn’t logically make sense, given our situation. I wonder if there have been a higher number of smaller properties let? I know that my kids’ friends are getting apartments for themselves rather than going flatting so it could be a culture shift leading to the same amount of people living in a larger number of properties, and hence more bond lodgement,” King said.
An MBIE spokesman confirmed the data was correct. The number of bonds taken had increased, he said.
In 2015, bond lodgement hit 346,794, climbing a year later to 357,408. By 2017, there were 364,377 bonds lodged, followed by 368,991 in 2018, 375,111 in 2019, 382,989 in 2020 and last year the number reached 386,683 by August.
King still doubts it: “The data doesn’t match up with the Trade Me figures, but that could be because people are trying not to use Trade Me because of the higher charges. It also doesn’t match up with comments from Renters United and Shamubeel Eaqub recently about a shortage of rentals,” King said.
Trade Me recently showed 9622 rental listings, of which 5660 were in Auckland.
Last week, the Herald reported that landlords’ investment property appetite didn’t change much towards the end of last year, with them still accounting for around 17 per cent of all borrowing.
Reserve Bank data showed investors’ appetite for property rising, from them borrowing $1.3 billion in October to $1.53b in November.
Their activity is staying relatively level but their share of buying remains significant.
Landlords accounted for 16.9 per cent of all new mortgage commitments in New Zealand in November, almost level-pegging with October’s 17 per cent, the Reserve Bank said.
Source: Read Full Article