Market Comment - November 2022
Diversity of Housing and Options: No shortage of units
Where is the year going? Another month passes by, and not surprisingly the inflation rate is now sitting at 7.2%, higher than expected and putting more pressure on interest rates. This of course will potentially slow new construction and maybe some developments will be put on hold. However, some real positives are starting to happen. The student market has recovered faster than expected this season which reflects a shortage of serviced accommodation on campus, so investors in student properties should see a good period going forward. I am sure the short-term Airbnb will also make a rapid recovery over the coming months. This could potentially take some good long-term rental stock out of the traditional rental market and create even more demand for well-located and maintained rentals.
Another shift becoming more evident is with group rentals, which we believe may be due to money not quite going as far and more people looking to keep costs down by renting together. Therefore, despite the abundance of smaller 2-bedroom type apartments, a resurgence of the larger rental property has become more apparent. It will be interesting to see how long this trend holds. Again, it is still a bit of a mixed bag for the unit market; I know I am starting to sound like a broken record but there will be plenty of two-bedroom stock continuing to enter the market, so let’s hope we see a steady inflow of people to Christchurch over the next quarter to help soak up some of this type and style of property.
Properties listed for rent on Trade Me are still historically quite low, but up slightly from this time last year. Helping to keep rents reasonably strong is the good news that the unemployment rate is at 3.3% meaning people are still in work which is a very important factor regarding the rental market. So yes, this is a period we must continue to focus on longer-term tenancies where possible. On that note, we are well underway with our January renewal process, are contacting tenants, and we will be in touch with you very soon.
This publication has been provided for general information only and does not constitute financial advice.