———- A word from Zac Snelling (Head of Property Management – Ray White New Zealand) —————-
Like a gardener preparing for spring, we’re nurturing what’s thriving and planting new seeds for growth after another month of heady demand in the residential property sector. Fresh off the back of Ray White New Zealand’s first annual conference since the pandemic, our people are energized and extremely excited about the months ahead. There have been some meaningful developments in the last 31 days – both legislative and sentimental, showing that Kiwis are getting their ducks in a row following a half-year reflection. We’re starting to see tangible effects of high levels of migration, low levels of new construction activity, and more than a year’s worth of private landlord apathy materialize as an acute supply-demand imbalance.
An elephant on a see-saw.
Across the country, demand for quality rental properties continues to outstrip supply. In my monthly survey of Ray White offices, 84 per cent of respondents said they are grappling with supply issues, and there are not enough properties to meet intense rental demand. Outside eastern Auckland, Palmerston North and parts of Christchurch, every Ray White branch from Kaitaia to Invercargill noted supply being a key constraint to activity. This is a clear indication that rental stock is not keeping pace with tenant demand, and is a primary driver for average weekly rental rates continuing to rise despite affordability constraints. In August, our national property management team received 25,819 viewing requests and 8,095 tenancy applications, resulting in 1,115 signed tenancy agreements.
There were 23 viewing requests and seven applications for every available listing. “Ray White’s Property Management network attracted 23 viewing requests and seven applications for every available listing in August.” Zac Snelling, Ray White New Zealand, Head of Property Management Across the last 12 months, the business has averaged 25 viewing requests and six applications for every available listing. This speaks loudly to the demand dynamic at play and makes a compelling case for the important service private landlords provide. These metrics also demonstrate the strength of our property management network in attracting and retaining (with efficient management) a dashboard of qualified tenants. Nationwide, average weekly rental rates pushed higher again in August, rising 8.0 per cent in the last 12 months to $566 per week. This outstrips average CPI, which, at 6.0 per cent in the July quarter, also remains strong, engendering whispers we could see another Official Cash Rate rise by early 2024. With landlords distinctly awake to the possibility of a change in Government – and the pledge to reinstate interest deductibility, reduce the Bright-line Test and reintroduce foreign buyers to the market – our teams are seeing greater enquiry from landlords carefully doing their sums.
The current dynamics of high demand, low supply and an improving outlook for the residential sales sector could see investors speed up plans for a return to the market in the months ahead, which would be a welcome development for New Zealand’s tenants. Greater private sector investment into housing supply remains the single best way to provide consistency and security for the one in three Kiwis living in rented accommodation whilst helping to ease upward pressure on rental prices. “Greater private sector investment into housing supply remains the single best way to provide consistency and security for the one in three Kiwis living in rented accommodation whilst helping to ease upward pressure on rental prices.”
B I L L S , B I L L S , B I L L S
It was pleasing to see the Property Management Bill passed its first reading in Parliament in August, now moving to the Select Committee for review. While the legislation is still several years from implementation, requirements around training, licensing and continuing education for professional property managers are positive changes welcomed by the broader industry. Regardless of the outcome here, Ray White New Zealand has been leading the charge to elevate property management processes, and through in-house initiatives, we proudly supersede industry expectations. Across the Ray White network, more than 100 members are currently enrolled in the New Zealand Qualifications Authority (NZQA) Level Four Property Management programme.
Combined with accredited team members, we aim to see 2024 with 100 per cent adoption of this standard across our entire network – a valuable point of difference demonstrating we are well-placed to provide services above and beyond our competitors. The industry expectation always has and continues to be our baseline as we maximise opportunities to add value for landlords and tenants nationwide. For the months ahead, we are thrilled to progress works on new products for landlords, which provide greater flexibility and add to our breadth of services. Dubbed Ray White Choice, we have received encouraging feedback regarding the new products and are on track to launch these in February 2024.
Backed by more than 30 years in business here in New Zealand, we know what’s important to landlords and tenants, which is the reason the three pillars of continuing education, financial auditing and trust accounting, and choice of services are the backbone of our business. With these as focal points, our teams across the country continue to lead the industry, providing customers and clients with consistency and confidence in diligent management processes. Nationally positioned to support any and all residential property management needs, my team and I welcome your enquiries and the opportunity to work with you as a tenant or a landlord in the months ahead.