Rent falls affect west Christchurch, not east

ELEVATELiz McDonald at The Press reports:

Christchurch’s falling rents are mainly in the north and west side of town, new figures show.

Bond figures show Christchurch’s median residential rent is now $394, after falling from a high of $431 in January as the increased supply of homes settles the rental market.

The latest figures reveal how rental patterns are shifting across the city.

In the northern and western suburbs ,including Redwood, Avonhead, and Broomfield to Halswell, rents in the past year have fallen by between 5 per cent and 12 per cent.

Inner suburbs show less change, with rents slipping less than 5 per cent in Sydenham-Woolston, Linwood-Bromley, Addington-Hoon Hay and St Albans.

The picture is different in the eastern suburbs of Burwood, Avondale and New Brighton, where red zoning has reduced the number of homes available and demand is more matched with supply. Rents in that area have risen slightly for two and four-bedroom homes in the past year, and are unchanged for three-bedroom homes.

Bernice Ireland, managing director of Quality Property Management, said rents in the east had less correction to make, as they had not risen as much as in the western suburbs after the quakes.
The cheaper rentals in the eastern suburbs were attracting tenants, including mortgaged homeowners awaiting repairs to their own homes, she said.

Agnes White, of real estate firm Agnes White and Associates, also noted that rents were “still holding up on the east”.

In suburbs were rents had dropped, landlords needed to be aware of the change, she said.
“The market has changed quite dramatically and there are not as many people looking for homes. There’s more properties available and rents have softened.”

The bond figures show that in the central city, where many new apartment complexes have replaced demolished ones, median rents for two-bedroom units have risen 6 per cent. Among one-bedroom central city homes, median rents have fallen.

Ireland said the market for one-bedroom units had slowed the most, after having been in heavy demand from workers arriving after the quakes.

It was inevitable that we’d see rents come down after the supply of housing in Christchurch caught up with demand. The eastern suburbs provide attractive opportunities for investors as they have traditionally had a strong rental market. However, investors may have to be content with a reduced return on investment as they can no longer charge the premium rents they were receiving in 2012 and 2013. This also creates an incentive for landlords to provide a decent standard of housing in order to attract good tenants.

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