Wellington Market Review - March 2013

March 2013, and the weather is only now starting to show signs of change. It's been a long, hot and dry summer, and rental activity has been high, but not crazy. Any landlord will tell you that January and February is the crazy period for renting a property, and rents are usually stronger during this time of the year. However, 2013 has thrown a few curve balls.

First up, tenant numbers are down. That's very noticeable, so despite stories popping up about landlords being trampled down in the rush with "a hundred people" coming to their viewings, it's not my experience, I'm sorry to say. Vacancy times are up, tenant applications are fewer, and the Wellington market seems to be less than frantic.

So what does that mean for Landlords?

Truth be told, it means rents are not soaring, even though John Campbell keeps telling us they are. That's certainly happening in Christchurch and Auckland, but not here in the Capital. A recent chat I had with a friend who has many of his own rental produced the tale of his most popular and "always the first to rent" property remaining vacant for three weeks, and him having to drop the advertised rent rate by $40 per week, even though the place had been completely earthquake strengthened and refitted throughout.

Having said that, the Hutt Valley seems to be steadily rolling on with reasonably strong rent rates, and more applicants and less vacancy time than in the city. As you might expect, family homes are the better bet in the Hutt, and are much sought after. Smaller two and one bedroom units and flats remain steady, but the top end properties in the more expensive suburbs are suffering a little.

In Wellington City, we are finding that furnished flats and apartments are shifting fairly quickly with good rents, but some of the standard three and four bedroom stock I'd expect to rent quickly are sitting vacant so that may be a reflection of the changes in the employment market in Wellington. Even student flats are not shifting as quickly as could be expected, and I can't offer an explanation for that either.

Now Autumn is upon us, and winter is lining up next, so as a landlord you should be looking to sign up fixed term tenancies through to January/February 2014 to protect you from rent loss and vacancy over the Christmas period. You should also be exploring insulation and heating options for your rental, perhaps scheduling in a spare weekend for some internal painting to spruce your place up, and even dragging the chainsaw out of the back of the shed and trimming a few trees and bushes around the place.

Better still, get someone to look after the place for you. Maybe I can put you on to somebody....?

managemyproperty is an independent Property Management company based in Wellington, New Zealand. Richard Horne remains a tireless and energetic investor and commentator, running an experienced eye over the property market.

Visit the website at www.managemyproperty.co.nz

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Is the Market Heating Up??

It's the end of the year, and we're seeing a lot more activity in the rental market in Wellington. That of course could just be seasonal, but I'm not so sure. The whole team in the Wellington office have been actively discussing how busy they are getting, and numbers at property viewings are on the increase.

Our rent reviews are also showing that Wellington rents are starting to firm up, and that we have almost definitely got past the downslide we've experienced over the last few months.
So what does this mean? Are there more tenants around, or is the supply side remaining tight?
If I could answer that, I'd be richer than I kid myself to be!

As we roll into January, the silly season is about to get under way and things are going to be pretty hectic for the next few weeks. If you are looking after your own rental properties, I have two words for you - "You're MAD!" There are a whole heap of new compliance regulations and legislative changes which make DIY repairs and maintenance to a property fraught with danger. Insurance companies are increasingly itchy following the Christchurch earthquake, and that's not all.

More and more tenancies are turning delinquent with rent arrears because of the prolonged financial squeeze that we have all been put under. That makes it even more challenging for private landlords to chase down any arrears and get things under control. The Tribunal courts are busy, and if you don't know the Residential Tenancies Act as well as I do, you can get into strife very quickly.

On a happier note, I am noticing more property owners are taking care of their rentals, with heat pumps, insulation, interior painting, and kitchen refits becoming quite common. Take a look at your rental now that the sun is shining, and ask yourself what would benefit your property and add value to it. That value can be twofold - capital improvement, and rental return.
Have a fabulous Christmas, and enjoy the holidays!

managemyproperty is an independent Property Management company based in Wellington, New Zealand. Richard Horne remains a tireless and energetic investor and commentator, running an experienced eye over the property market.

Visit the website at www.managemyproperty.co.nz

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Wellington Market Review - September 2012

All quiet on the Western Front, but the Cavalry could be on the way! It’s been a long and quiet winter, but now spring is here and the sun has started to shine. Despite media reports of rising rents and queues of tenants out the door, it’s not happening here in Wellington.

Rents in the Capital are down 2%, and have been sliding further than that in some cases. Tenant demand has also dropped, so there are plenty of vacant properties in the region. However, a change in the weather often breathes new life into the rental market, and students are starting to look for accommodation for next year, so we are seeing some small signs of improvement.

Properties are letting, and sometimes there is no rhyme or reason for why one place remains vacant for weeks while another gets snapped up instantly. As I said in our last blog, if you’re thinking about putting the rent up, think again!

What’s the Government saying?

http://www.minhousing.govt.nz/market-rent. You'll find the Department of Building & Housing statistics interesting reading.

What’s Happening with Advertised Rents? 

Rents are still on the slide across the board, and if you do some research you’ll also see that many properties are remaining on the market (and thus untenanted) for long periods.

Top Range:

Quality top end properties are not totally avoiding vacant down-time, but this sector doesn’t change much, whatever is going on in the general market. Rent rates remain reasonably strong here.

Mid Range:

Frustratingly, rents are still receding for this sector, and it comes down to a lack of tenants.

Lower Range:

Rents for one bedroom flats and studios are depressed, and fewer people are requesting viewings, so even this sector is seeing little activity right now.

If I was advertising a property now, what can I expect?

You can reasonably expect a frustrating silence being generated from your advert, to be honest. If you want to improve the hit rate for your property, install a heat pump or insulation, and paint the place. Maybe consider new carpet, or fit a new kitchen with a dishwasher.

Be prepared to jump in the car at any given moment to show your property if someone contacts you. That means your evenings and weekends are going to be interrupted frequently. On the other hand, perhaps you should consider getting a property manager to do this for you…

managemyproperty is an independent Property Management company based in Wellington, New Zealand. Richard Horne remains a tireless and energetic investor and commentator, running an experienced eye over the property market.

Visit the website at www.managemyproperty.co.nz

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Wellington Market Review - July 2012

I have my own opinion on the current rental market in Wellington, but this month I’ll let others do the talking. Here are some recent comments on what’s happening:

·       “Wellington rents have dipped a little in the last three months compared to the same time last year as landlords try to fill a glut of empty properties”

·       “The huge oversupply of rental properties make it the worst market I have ever worked in”

·       “A good quality house still sitting empty three weeks after dropping the weekly rent by $20 to $400”

Current occupancy rates have dipped below 90% which means that, on average, rental properties are vacant for up to four weeks in the year.

Rents in Wellington are down 2%, and tenant demand is down 4%, according to Trade Me. Lower Hutt rents are not moving in any direction, so the market remains flat and gently receding.

If you’re thinking it’s about time you put the rent up, think again!

What’s the Government saying?

http://www.minhousing.govt.nz/market-rent. You'll find the Department of Building & Housing statistics reflects this view.

What’s Happening with Advertised Rents? 

Rents are receding or staying still. There’s a glut of vacant properties available right now that remain advertised for several weeks. If your place isn’t getting rented, drop the rent rate until you secure a tenant.

Top Range:

As seems to always be the case, top end properties are still bowling along merrily. Sometimes there is vacant down-time, but this sector doesn’t change much, whatever is going on in the general market.

Mid Range:

Flat and static, so nothing to report really. Tenants are few and far between, and only good quality properties in excellent condition are renting quickly.

Lower Range:

There’s always demand for one bedroom flats and studios, but now the winter is upon us, even this sector has receded. Rents are dropping, and we’re noticing a huge drop off in the number of calls we are getting to view places.

If I was advertising a property now, what can I expect?

You can reasonably expect a frustrating silence being generated from your advert, to be honest. If you want to improve the hit rate for your property, install a heat pump or insulation, and paint the place. Maybe consider new carpet, or fit a new kitchen with a dishwasher.

Be prepared to jump in the car at any given moment to show your property if someone contacts you. That means your evenings and weekends are going to be interrupted frequently. On the other hand, perhaps you should consider getting a property manager to do this for you…

Wellington Market Review - May 2012

The weather service tells us that winter isn’t here yet! The market is telling us that the summer rush is over, and so vacancy periods can get longer, and there are fewer tenants at open homes on the weekends. Rents are in some cases still clicking up a little when a tenancy ends, but rent rates in Wellington remain fairly static.

Now is the time to take a good look at your property for maintenance needs, and also do those improvements that will make it much more attractive to tenants – install a heat pump and insulation, provide whiteware like fridge and washing machine, re-carpet and re-lino the floors, give the place an internal repaint. Also don’t forget to trim the section back and neaten up paths and driveways.

What’s the Government saying?

http://www.minhousing.govt.nz/market-rent. You'll find the Department of Building & Housing statistics interesting reading. Generally though, rents have lifted a little, and there are increasing signs of improvement.

What’s Happening with Advertised Rents? 

Some apartment complexes are attaining improved rent rates as tenants move on, and there have been modest gains with inner city quality apartments. Flats, units and smaller houses are also starting to show signs of heading upwards.

Top Range:

Popular thinking would tell you that big, luxury homes with high rents are difficult to let, but this sector of the market remains quietly steady, and shows more continuity.

Mid Range:

Now that the summer rush is over, rents have stabilised as demand quietens down. However there are still tenants on the move looking for good quality family homes.

Lower Range:

Rent rates in this sector remain relatively healthy, and returns seem to be stronger on one and two bedroom units and flats at the moment. There also seems to be plenty of stock available as investors get back into the market.

If I was advertising a property now, what can I expect?

Make sure you have good photographs of your property that show it from the best angles. Avoid photos of the toilet (!), or grainy, out of focus snaps. Also make sure you write a lively and engaging description of your property. Check out what’s being done on TradeMe to get a feel for what makes a good advert. You should have your property listed and advertised in at least six different media formats so that you are reaching as many potential tenants as possible.

managemyproperty is an independent Property Management company based in Wellington, New Zealand. Richard Horne remains a tireless and energetic investor and commentator, running an experienced eye over the property market.

Visit the website at www.managemyproperty.co.nz

Follow us on Twitter

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Wellington Market Review - March 2012

It’s Autumn now, and the market has steadied as it traditionally does at this time of year. Properties are letting much more quickly than they did last year, and rents are showing signs of strengthening too. Some areas around the country are achieving much higher rates than Wellington, but there is definitely an improvement in the market.

What’s the Government saying?

http://www.minhousing.govt.nz/market-rent. You'll find the Department of Building & Housing statistics interesting reading. Generally though, rents have lifted a little, and there are increasing signs of improvement.

What’s Happening with Advertised Rents? 

Some apartment complexes are attaining improved rent rates as tenants move on, and there have been modest gains with inner city quality apartments. Flats, units and smaller houses are also starting to show signs of heading upwards.

Top Range:

Large and top quality family homes remain quietly popular. Very few remain empty for long, and as the winter approaches, these properties should fill quite quickly now.

Mid Range:

Rents are strengthening steadily and vacancy times are getting shorter, although the student market has subsided considerably. Young couples are starting to appear at open viewings and these properties are also showing signs of activity.

Lower Range:

Rents in this sector remain relatively healthy, and there are some good property deals out there from what we are seeing. Investors in Wellington seem to be favouring this property type, and I've seen a good number of new owners bring their one and two bedroom units and flats to us for management.

If I was advertising a property now, what can I expect?

You should have your property listed and advertised in at least six different media formats so that you are reaching as many potential tenants as possible. It’s definitely the best time of the year to advertise a rental as demand is high and the number of available properties is lower than usual.

managemyproperty is an independent Property Management company based in Wellington, New Zealand. Richard Horne remains a tireless and energetic investor and commentator, running an experienced eye over the property market.

Visit the website at www.managemyproperty.co.nz

Follow us on Twitter

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We Have Lift-Off!

Summer, such as it's been here in Wellington, is making its presence felt. It's definitely warmer, but the rain is a bit persistent! And from the moment we got back to the office, the phones have been ringing and emails flying - everyone is on the move and the market has awoken from the long dark winter of discontent.


But don't get complacent. This doesn't necessarily mean that you're going to get trampled down in the rush from tenants wanting to rent your place, although it can happen. Here's a wee story that blew me away, and it's from personal experience.

We have a new client who owns a house in the heart of Wellington, with four bedrooms on two floors, and a distinctive "student" feel to it. It's got heaps of character (you know, wooden staircase, high ceilings, giant sash windows, creaky old cupboards and a Victorian bathroom) and it's close to almost every educational seat of learning the capital of New Zealand has to offer.


Our new client signed up on a recent Friday morning, and two hours later put a full advertisement up on Trade Me, with some good photographs. Within five minutes of the advert going up, we started receiving phone calls, texts, and emails. Our text shortcode service went crazy with people texting for details. When that level of interest is sparked, it's time to arrange an open viewing really quickly.


So that Sunday at 3.30pm on a wet, windy and unseasonably cold afternoon, I drove to this lovely old property to spot a small group of about ten people patiently braving the elements outside the house. Little did I know that this group of ten were the tail end of a queue of people stretching down the path to the front door. I squeezed past them all and opened up the empty house and starting letting people in.


the stream of people didn't stop! I soon had a stream of people going up the right hand side of the stairs, and another stream coming down the left hand side. Every room had a crowd in it. The kitchen and dining room had people furtively grabbing application forms and shouting for pens to fill them out. I had to explain to large groups on each room that applications should be done online (www.apply.net.nz) and tell them what makes a good tenant.


It was CHAOS!! The best kind of chaos, from a property owner's perspective.


Within the next 48 hours, we received over seventy applications online, and a whole bunch more were handwritten, scanned, emailed, posted and handed in to our office. Phew!


So how do you choose from this tidal wave of fresh faced and bushy tailed prospective tenants? Where do you start?


Well, three particular groups stood out for me, and what they did was very simple. In fact it amazes me that more people don't do this as a matter of course when applying to rent a property. Each of these groups presented me with printed information on each of the applicants in their group. They had their names, ages, references with phone and email details, a list of work and education experience, and an explanation of how they all knew each other and why they wanted to move in together.


They also each explained that, as students, they were looking to have a place to study towards their exams, rather than setting up Party Central and wrecking the place.


Simple, but real genius. I've lost count of the number of people who turn up at a property viewing who want to take the place, but when I ask them for good references, they seem bewildered and unprepared for this obvious requirement. Kind of like going to an auction and then being surprised when someone tells you you'll need money to pay for anything you buy there.


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managemyproperty is an independent Property Management company based in Wellington, New Zealand. Richard Horne remains a tireless and energetic investor and commentator, running an experienced eye over the property market.

Visit the website at www.managemyproperty.co.nz