As we navigate the bustling holiday season, let's take a look at the current state of the rental market.
In Christchurch, there are currently around 800 rental properties listed on Trade Me, a figure that has held steady for the past few months, showing an increase from the same period last year. The recent migration inflow has been reported at 119,000, contributing to a 2.3% population boost. This influx is a significant driving force behind the demand for housing, especially as we enter the busy rental period leading up to the new year.
Fortunately, the unemployment rate remains low, providing stability to the rental market. However, there are additional factors at play, such as the pressure on interest rates, expected to persist until 2025, and a slowdown in residential property construction due to rising building material and labour costs. These elements are likely to impact rental rates as property owners seek to offset increased costs related to maintenance, insurance, and mortgage repayments.
Looking ahead, there is a possibility of changes under the new government, potentially involving an easing of the bright-line period, possibly returning to two years. Coupled with potential tax adjustments, this may attract more investors back to the market in 2024. Given the rising cost of living and inflation, it appears that more individuals may opt to continue renting for the foreseeable future.
In terms of recent trends, November has seen steady inquiry levels, although properties are taking a bit longer to rent. This may be attributed to the two long weekends in the last 4 weeks, and people delaying decisions until the new year.
As we await the outcome of the new government, it is hoped that we will gain clarity on housing policies, providing a more defined direction for the market.