The rental market is experiencing a rollercoaster ride since Covid-19, particularly in parts of the South Island.
An over-supply in Queenstown has forced landlords to significantly drop their prices as people leave the country or become stuck here.
Excluding Canterbury, the average rent price in the South Island has dropped nearly 10 per cent compared to June last year.
Queenstown is feeling the brunt of it with Harcourts saying rent values there have gone down as much as 40 per cent in some cases.
“We’ve been through a bit of a rocky ride over the last few month or so, but it’s kind of leveling out quite nicely now,” says Paul Hibbett from Harcourts Property Management.
“A lot of tenants departed over that time. We’ve seen a lot of redundancies.”
The downward trajectory for Queenstown is at odds with the latest data showing a slight increase in rent prices nationwide.
“We know tourism’s taken a hit and so that will be flowing through the Queenstown economy more than elsewhere,” says CoreLogic’s Kelvin Davidson.
“The supply and demand scenario is just different, we’ve seen probably a bigger inflow of new supply into the rental sector in Queenstown than elsewhere.”
While it’s good news for tenants, it’s added pressure for landlords.
“They’re at a level where they’re only just breaking even,” says Mr Hibbett.
The situation could get worse for landlords before it gets better.
“It might fall away more in the near term, but I think that just gives it scope to bounce back faster in the long term as people return and want to go there,” says Mr Davidson.
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