Mike Atkinson: Aspire Property Management's Managing Director on median rents dropping nationally

Rising supply and falling demand is pushing down rents. 

New Cotality analysis of MBIE data shows the national median rent dropped 0.3% in the year to May. 

That's the first time the rent has dropped in more than 15 years. 

Aspire Property Management's Managing Director Mike Atkinson told Mike Hosking housing supply is increasing at the same time incomes are falling in real terms. 

He says there's also been a huge drop-off in net migration, with fewer people coming into the country. 

However, there could be some good news on the way for landlords. 

Atkinson says things should pick up over summer, when migration typically increases. 

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Episode Transcript

Speaker 1 (00:00):
So the rental market continues to trend towards the rent
and new numbers out this morning shows the national media
and rental fell zero point three percent. This is three
months to May. That's the first national drop since two
thousand and nine. Mike Atkinson, Managing director of Aspire Property Management,
is back. Well this Mike morning to you, Good morning.
Has this got something to do with the population? Fewer
migrants coming to the country, therefore it's the classic supply

(00:21):
demand scenario.

Speaker 2 (00:23):
I think it is. I think there's sort of three
key drivers behind this, and one of them is obviously
the lack of demand, because you know, two years ago,
I think we had a plus one hundred and seventy
five thousand people coming into the country. This year only
plus twenty six so that's a huge drop off. And
then you pat, you know, you combine that with we've
got fourteen thousand properties up for rent on trade me

(00:44):
today this time last year only eleven thousand, so you know,
that's a twenty percent increase in the number of properties.
And at the moment also tenants, you know, they have
less money to spend on rent a household and comes
rent up one point seven percent last year but that
was nominal also not including inflation, which was about four percent,
So your tenant has two point six percent less money

(01:07):
to spend on rent as well. So when you combine
all of those three factors, we are looking at having
our first year with a drop in rents across the
country going all the way back to two thousand.

Speaker 1 (01:17):
What about the other side of the equation, the interest
rates are coming down, the investor might be a bit
more active. You buy a house, are they about the
place and therefore they're adding to supply?

Speaker 2 (01:26):
Yeah, so, I mean landlords have had a really tough
time recently. So while it could be you know, another
three months of paying for landlords, I do see a
bit of light at the end of the tunnel. When
you know, migration is seasonal, so when we head into summer,
we should see those numbers come up.

Speaker 1 (01:43):
What's your call for the rest of the year. What
do you think is going to happen in terms of
the actual rate? See I look around the country. It's
about six hundred ish, isn't it. With a few variations,
about six hundred and something dollars will get you a.

Speaker 2 (01:55):
House, that's right, So you know, for landlords they might
be a bit concerned about seeing that these rent numbers
had come down, but over the last seven years they've
gone up fifty percent, so you know, they're still getting
more rent than they were getting a couple of years ago.
My prediction for the rest of the year is that
there is a bit of a lag in these numbers.
We sort of saw all these drivers lining up as

(02:17):
early as sort of July last year, so I do
think that we could see another quarter with the rents
coming down before they hopefully go back to flat. But
I do think that by the end of the year
things could be in a better place for landlords.

Speaker 1 (02:29):
All right, good, and so I might appreciate your time.
Mike Atkinson, managing director of A Spy.

Speaker 2 (02:34):
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