Property managers warning landlords after sudden change in rental market

Property managers say the rental market has suddenly changed and tenants are in the driver's seat. 

Trade Me figures show a record high supply of properties nationwide, combined with a drop in demand for rentals. 

Harrison Vaughan, Tommy's Property Management managing director, said properties are taking at least three times the length that they used to take to fill. 

"You used to be able to just throw a property online and get a huge amount of inquiries and actually have a line out the door for your viewings. Now it's very, very hard to get that," Vaughan said. 

"You might get one or two phone calls a week and you'd be lucky to get a person through your viewings." 

For example, a four-bedroom renovated family home with stunning views in the capital took 92 days and a price drop from $1300 to $1100 a week to fill. 

Vaughan said it's a widespread situation. A three-bedroom, two-bathroom Wellington city apartment is still up for grabs, despite being listed in February.  

"Usually a place like this you'd expect to rent in a matter of weeks, and with it still being on the market vacant it was obviously a bit of a surprise," Vaughan said.

The rental market has significantly changed, almost overnight. 

"This year we noticed that the inquiries weren't coming in the tidal waves we were used to, so they all sort of slowed down and from there it's just sort of been a real slow drag," Vaughan said. 

David Pearse, the Residential Property Managers Association chairperson, agrees. 

"Sort of overnight, the properties just went off the boil and then we've got situations where they're sitting empty for a couple months," he said. 

Trade Me figures show the number of properties listed for rent in the country reached an all-time high in May.

The supply in Wellington jumped 45 percent year on year, while Auckland and Marlborough also saw a record number of listings.

There's also been a drop in demand for rental properties, down eight percent nationwide.

"There's more stock, the prices are coming back, the inquiry levels are falling, in the provincial areas it's the executive homes people aren't really going after them anymore. It's that cost of living playing a huge part of it as well," says Pearse.

A number of other issues include the beginning of a brain drain and a lack of international students to fill properties.

Pearse is warning it's a wake-up call to landlords.

"At the end of the day, [landlords] can't expect the rents to be climbing the way that they are, I don't think they are sustainable."

Geordie Rogers, Renters United president, said it's positive news but it still isn't "a luxury zone yet" for tenants. 

"Unfortunately for renters, it's still the same story, we are still seeing rental prices that are unaffordable, especially for those on the lower end of the rental market, lower end of incomes are still continuing to see increases." 

Suddenly, it's a renters market but only for tenants who can afford it.