Students and young professionals are having to consider living alone as many reassess their accommodation because of a lack of suitable three- and four-bedroom rental properties for flatting.
Hamilton’s largest property management company, Lodge City Rentals, had just 25 empty homes on their books available for rent in January, and with growing rental housing demand in the city, it was becoming almost impossible to secure a three- or four-bedroom home to flat in.
Lodge City Rentals General Manager Jason Waugh says students returning to the city to study or young professionals were having a let go of their ideals of living in a shared flat with their friends and instead opt for a one-bedroom studio room which often saw them living alone.
Lodge City Rentals had a total of just 75 empty properties on their books and 55 of them were studio rooms, many of them one bedroom. By contrast Lodge had 3,970 enquiries for rental properties in January, one of the highest months experienced.
Jason says the studio room segment of the market was traditionally used by students, but many young professionals or others who would normally like to flat with other people, were having to consider the one-bedroom studios because there are no larger rentals available.
“There are a lot of pressures on the market currently. Students are returning, people are wanting to relocate to the city for jobs, or a change in lifestyle, and there are not enough larger houses to go around,” says Jason.
“Young people are having to rethink the traditional idea that you go flatting with your friends,” says Jason.
He says it’s not just students and people wanting to go flatting. Many first home buyers were also now looking for rentals.
“There are also a lot of people who would be first home buyers who now find themselves in a position of not being able to get into the property market, so they also need rentals,” says Jason.
He said it was “the perfect storm” and he couldn’t see the problem easing anytime soon.
“It’s not surprising but it is just a reflection of what is happening in the market.”
While there has been much publicity around how tight the rental market is and the rising cost of rentals, Jason says recent suggestions of introducing rent controls as a measure to manage the issue seemed to have been taken off the table for now.
The Government had signaled the possibility of rent controls at the start of February, but Jason says in a recent webinar given by Minister Poto Williams, to the industry, indicated this measure wasn’t being seriously considered at present.
Jason says it was indicated that Government is set to introduce discussion around bringing all property managers in New Zealand under one regulatory authority to create a level playing field.
“Most in the industry see it as a positive, but it could have limitations as it would not impact landlords who were managing their own properties.”
It was also now a measure that would have real impact on the rental shortage being experienced around most of New Zealand.
“There is still the potential to have rogue landlords, but it is a good decision to move forward and bring everyone under the same umbrella to make sure we’re all playing by the same rules and offering the same service,” says Jason.
The New Zealand market is uniquely unregulated, and the Privacy Commission has already said, starting in March, it will start cracking down on errant landlords and property managers who it was claimed were making requests of tenants that were questionable in terms of privacy law.
“It will certainly help to provide a consistent level of service and help tenants know what they can expect across the industry but it won’t address the immediate concern of a lack of rental properties for people to live in,” says Jason.