Kelvin Davidson: CoreLogic chief property economist on rental prices decreasing for the first time in two years

New data indicates the financial pressures are easing on renters.

Rental prices have decreased for the first time since 2022, according to Trade Me’s Rental Price Index for June 2024.

CoreLogic chief property economist Kelvin Davidson says this is a sign the rental market has shifted in favour of tenants.

"There's a bit less demand out there and a bit more supply - so we have seen rents slow. They may not necessarily fall over the longer term, but I'd say they've flattened out."

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Episode Transcript

Speaker 1 (00:00):
Finally we've got some respite for renters. Trade mee's latest
property data has shown rental prices have decreased for the
first time since twenty twenty two. Just happened this month,
but only by five dollars. Calvin Davidson has called Logic's
chief property economist and with us, Hey, Calvin, what do
you reckon? Is this a one offer a trend?

Speaker 2 (00:17):
Well, whether we get a month or month falls from
here on. I think there's a little bit of You
don't really tend to see rents fall in any prolonged way,
but certainly there's a bigger picture here that rental growth
has slowed down. The rental market has shifted in favored tenants.
There's a bit less demand out there and a bit
more supply. So we have seen rent slow. They may
not necessarily fall over the longer term, but I have

(00:39):
certainly flattered down.

Speaker 1 (00:40):
Yeah. The lack of demand is that as a result
of immigration slowing down.

Speaker 2 (00:45):
Yeah, I mean it's not that demand's falling necessarily, but
the rate of growth has certainly slowed down. Migration is
coming off its peaks. There's still people arriving in net terms,
but there's also people leaving, and so I think it's
probably more of a story of just a little bit
of that heat coming out at the storm migration there,
but not as fast as one flaws.

Speaker 1 (01:04):
What do you reckon landlords should be thinking at this point?
I mean, should they be considering dropping their rents to
get people in or is it not quite at that level?

Speaker 2 (01:11):
Well, I mean up to the nvidew in the end,
I mean i'd also make a distinction between these figures
relate to what's happening on the market right now. Tenants
circling round landyard's circle round, they don't really apply to
people already in existing tenancies. So if landlords have existing
tenants that those rents are going to be at least
if it's on a fixed least, those rents aren't going
to change at least still in their terms. So it

(01:33):
does relate to the market. And so yes, if landlords
are out there freach logging for some tenants, you know
they'll have to price right to the market. I guess
in some locations that might still be stronger. Other locations
might be that weaker.

Speaker 1 (01:46):
Calvin's good to talk to you, Thank you mate, appreciate it.
As Calvin Davidson, chief property economist. A call logic for
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