The Huge Shift Between Landlords And Renters As Rentals Stay Vacant In Wellington

Mary
Argue, Reporter

A glut of vacant rentals
in the capital city has shifted the dynamic between
landlords and renters, with some tenants knocking close to
$100 off their weekly rent.

Landlords are offering all
kinds of incentives to entice people to viewings, and those
who are looking for a home have found they’ve got their pick
of the bunch.

Property experts say it’s a stark
contrast to a couple of years ago, when the market was a
“little bit crazy the other way,” with rents rising every
year.

TradeMe’s August data showed that while the
national median rent remained flat at $620 a week,
Wellington prices continued to fall to $595 – down 8.5
percent year-on-year.

Cotality chief property
economist Kelvin Davidson said rents were still high
compared to incomes overall, and a tenancy advisor urged
tenants to take advantage while the market
was in their favour.

Better now, but still not
the best

South coast resident, Ross, described the
past 10 years renting in Wellington as a mixed-bag in terms
of housing quality – but could easily point out the
worst.

“It was really terrible. I got electric-shocked
in the shower one morning. We had a private landlord, and it
was basically his project house and we’d have contractors
coming in and out.

“That was my worst flatting
experience ever.”

He said his current place was great,
but following a job loss and two flatmates leaving, had
decided to look elsewhere, but found there weren’t many
people going to viewings, and the ones that were, were
negotiating on price.

After learning their property
manager was concerned about filling the place, Ross said
they decided to change tack.

“That kind of gave us the
confidence to go on and say, ‘We’d be looking for a bit of a
decrease.'”

They asked for $90 per week to be knocked
off the rent – and got it.

He said while it was a
considerable amount that would help him at the supermarket,
overall, housing affordability was still an
issue.

“It’s better as a renter now, but contextually
it’s still not the best. Being able to spend less on your
rental so that you can work towards your own property is a
big bonus.

“[But] I was part of the redundancies in
the public service in October last year, so that’s kind of
put a hold on that.”

‘Flipping of the
script’

Founder of Tenancy Advisory, Sarina Gibbon
said tenants needed to act while the market was in their
favour.

“Hearing, seeing, feeling a flipping of the
script in terms of the power dynamic between landlords and
tenants, because that is very much driven by the reality of
being excess supply and insufficient demand.

“Tenants
who for so long just have to suffer … forking out most of
their income each week, just to get a roof … I’d love for
more tenants to take action at this moment and realise that
they have leveraging power.”

But she warned that the
rebalancing of power was superficial and unlikely to
last.

Gibbon said tenants should look at what would
improve their living situation, while they could – whether
that be reduced rent, better chattels, a healthy homes
inspection, or even knocking out clauses in the tenancy
agreement so that they could enjoy 2025 prices for
longer.

Head of the Property Investors Federation, and
president of the Wellington branch, Peter Ambrose said the
number of vacant rentals in the capital, was the highest
he’d seen in a decade.

He said the Wellington market
usually hovered around 500-1000 vacancies according to
TradeMe listings, but in June this year it peaked at more
than 1700 – a conservative snapshot, as it didn’t account
for rooms advertised on social media.

Ambrose said on
Thursday there were just under 1400 which was still
“extremely high,” and said job losses in the public and
private sector, as well as lower numbers of university
students, were behind it.

“There is a lot of choice
out there. Some landlords have experienced vacancies just
about all year on some of their properties. I personally
know people who haven’t been able to tenant the place for a
few months so they’re taking it off the market and looking
to do a complete renovation.”

He said the real issue
was getting people to viewings.

It was a stark
contrast to a couple of years ago, which he described as “a
little bit crazy the other way,” with lines out the door at
viewings, legislation to stop bidding wars, and rents rising
every year.

Ambrose and Gibbon said landlords were now
offering a range of incentives, such as free weeks rent,
whiteware, and paying for internet and moving costs, to
entice people through the door.

‘Why are you trying
to bribe us?’

For the past couple of months, Lower
Hutt resident Angie has been turning down rentals and
fending off property managers.

“Every placed we’ve
applied for we’ve been offered the tenancy. It felt like a
little bit desperate. Felt a bit of desperation from the
property managers.

“It seems like when they get
someone that’s keen on the place they’ll bend over backwards
to give you the tenancy.”

Her current place, which
she’s been in for a decade, is being sold but said she was
under no time pressure to move, so was doing her due
diligence.

She said in her search, she’d come across
some “clearly converted office buildings,” and also
landlords offering incentives to prospective
tenants.

“A $400 grocery voucher, a week free rent,
two weeks free rent – just all sorts of different sign-on
bonuses, basically.

“Which was a great incentive to
look, but then it also gave me pause, like ‘Why are you
trying to bribe us for this property?’ So you look at things
a little bit more cautiously.”

She said she was
tempted by one place that had dropped from $1400 per week in
rent, to $675, but on second viewing found a “massive leak”
in the communal hallway wasn’t being attended to.

“I
just think some of these properties haven’t had the TLC
that’s required and it’s coming back to bite
them.”

Will rental standards lift?

Gibbon said
landlords needed to pay attention to the current market, and
only the “strategic and confident players” would
survive.

“Good quality properties are being taken off
the market very quickly. The ones that are sticking around
are either flawed in certain ways, or the owner is just not
being price realistic.”

She said tenants weren’t after
gold-plated kitchens, and at the very basic level, landlords
needed to lift the rental standard inline with
owner-occupied homes.

“Tenants are sick and tired of
feeling like second-class citizens. I think landlords need
to recognise that it’s not about putting the lipstick on the
pig, so to speak, but just making sure it’s not a pig in the
first place.”

Ambrose said landlords needed to meet
the market where it was at and that meant reducing rents as
well as ensuring quality.

“Making sure you have a
well-maintained home or flat is absolutely
paramount.”

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