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Housing in Auckland - Source: ONE News -
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The cost of living in Auckland is set to go up and the warning is that renters will be hit the hardest.
Auckland property management company Boberg's First National is warning the city could soon be facing a rental housing crisis.
It believes the government's plans to crack down on investment property tax advantages have prompted many landlords to sell houses to owner occupiers, shrinking the rental market.
"Since the government first raised the issue of property tax changes in August last year, there has been an increase in the exodus of landlords from the rental market, mainly landlords who have been in the market for 30 years," says Wayne Boberg.
Boberg says there has been a noticeable shrinkage of available properties, with half the number than there were six months ago.
"We also have on top of that an increase from immigration, we have organic growth of population, we've got probably the worst thing to come to us yet which will be the leaky home issue with homes becoming uninhabitable," he says.
Auckland in particular has not built enough houses to accomodate the larger number of people moving to the city, Boberg says.
"So you put all that together with harder bank finance and we are probably heading towards a perfect storm."
Boberg says there are no incentives anymore for people to go into property.
"One has to ask who is going to buy the property that's going to house the people in the future and who's going to build the property. We've got no new high rises going up and no new mezzanine finance," he says.
"So is the government going to be building these properties? Somebody is going to have to build the property or we are going to end up with trailer parks."
Auckland's biggest real estate agency Barfoot & Thompson agrees that there is a growing shortage of rentals.
"Just about all of our branches are reporting a lack of property to let," says rental manager co-ordinator Helen Hodgson.
"Our weekly rent is up, it's up 2.5% but the number of properties rented is down 10%."
The median rent in Manukau has jumped $25 a week in the last six months.
Massey University professor Bob Hargreaves says there is one hope of rents holding.
"As the Australian economy starts to get better and it is moving, we'll start to get an exodus of Kiwis leaving for higher wages and salaries in Australia so that could moderate things," he says.
However, the good news is that people are beginning to build houses once again.
Official figures just out show the volume of residential building activity made its largest leap in over two years, just before Christmas.
