31 October 2008

More people than ever are renting homes and they’re doing so for longer periods at different stages of their lives, says Jeff Montgomery of the Department of Building & Housing (DBH).
For this reason, there will always be a need in the private sector for private landlords, he says. “There will continue to be demand for rental properties. Demand has increased and no-one is suggesting it won’t continue.”

The biggest growth in rental properties has come, not from the public sector, but “from Ma and Pa investors, those who own one or two or three properties”.

Montgomery says these private investors play an important role in offering homes. And there’s a need to put effort into ensuring landlords, especially accidental landlords, brought about by the current economic circumstances, understand the obligations that tenancy brings.

However, Montgomery says the increase in demand for rentals is less about the economic environment than part of an international trend.

“For various reasons, there has been an increase over a number of years in the proportion of people renting. Around one in three live in a rented home.” This has been gradually increasing for the last 10 years due to:

• desire for more flexible arrangements for work
• the affordability issue – it takes longer to be able to afford to buy
• immigration – people come to New Zealand and move into a rental environment then later move into their own homes

Montgomery says people are renting for longer and more people are renting in their 30s, 40s and 50s. He says, when many people think of renters they have [student-like] flats in mind. “But the growth has been in ‘older’ people choosing to rent. They may own a home but they’re just not living in it. There’s a need for quality rental properties for these people.”