Two factors could hinder the market's growth
The rental market has continued to thrive in May despite the COVID-19 crisis and the lockdown. However, its condition might change in the remaining months of 2020, according to Trade Me Property.
Aaron Clancy, a spokesperson for Trade Me Property, said the New Zealand rental market had seen stable price growth in the last 24 months. With the alert level restrictions loosening, Trade Me expects an increase in rental demand for the rest of May.
“After spending seven weeks at home, many Kiwis will have had plenty of time to rethink their current living arrangements,” Clancy said.
“So far, in May, we’re seeing a lot of activity onsite with listings of rental properties shooting back up when compared to April and plenty of potential tenants coming on to search for a new home. We expect to see some very interesting numbers at the end of the month, and we suspect plenty of tenants are looking to make a move and will be enticed by the fresh stock that will hit the market.”
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However, the COVID-19 pandemic and the rent freeze might hinder the rental market's growth and cause significant change for the rest of the year.
“It’s beyond May where things get unclear – with landlords unable to issue a notice to terminate tenancies for the next few months, the rental freeze in place and uncertainty around the economy may cause a dip in the supply of rental properties. However, short term accommodation being moved on the long term rental market could help to balance supply levels,” Clancy said.
“After many of New Zealand's 15 regions experienced months of solid price growth, the impact of COVID-19 will significantly change the playing field for landlords and tenants in 2020.”
“The rental price freeze will bring a sense of relief to renters that are facing many unknowns. But it may be a concern for landlords with uncertainty around their own costs. Ongoing discussions on potential council rate increases will be making some landlords nervous,” Clancy concluded.
