Six months ago an average of five prospective tenants were viewing each rental property, but today that number is 50, Impression Real Estate reports. Chief Executive Rishabh Kapoor explores what is driving the rental shortage
A chronic shortage of residential rental stock caused by increased migration and recent weather events is reaching a crisis point.
Impression Real Estate figures show the number of prospective tenants viewing each rental property has increased 900% – from an average of five per property to over 50 in just six months. Data also shows prices have increased by around 5% over the same period.
The shortage is putting additional pressure on Auckland’s inner-city property market and desperate tenants are offering up to $50 per week more than the listed price. Some have even offered bribes to property managers to secure a rental ahead of others.
The high demand for CBD apartments comes from those who have lost their homes as a result of storms earlier in the year, along with recent migrants.
The rapid growth in these two market segments has significantly increased the number of people who are new to renting and unfamiliar with current industry regulations.
More needs to be done to better inform and educate landlords and, these new tenants who are often unaware of their legal rights and responsibilities under the Residential Tenancies Act.
Latest research from the Ministry of Justice shows there are an average of over 2,100 applications to the Tenancy Tribunal each month and they are up 43% on the same period last year.
In a first for the local industry, the real estate firm has artificial technology (AI) designed to help tenants find new properties and educate them, and landlords, on their rights.
The technology which uses a chatbot as an interface for tenants and landlords, is currently being trained to answer a wide range of questions and is available at any time of the day – especially valuable to new migrants who may be searching for information while still living in a different time zone.
The bot has been named Marcia after one of Impression Real Estate’s team members. For the past 15 years, Marcia has answered numerous inquiries and we wanted to be able to share her expertise in the form of a virtual avatar with our clients.
The new AI chatbot will be able to answer common queries such as how to receive a bond refund, where they can find a copy of their lease agreement, or how to locate a plumber for a water pressure issue.
As well as providing practical solutions and driving greater efficiency, over time, it will learn to assist with the legal fundamentals of the tenancy and help tenants and landlords to adhere to their legal obligations in a very transparent way.
While technology is part of the solution for these new tenancies, Impression Real Estate urgently needs another 120+ homes or apartments, to meet market demand.
What we have noticed is that after the recent weather events our clients have decided they no longer want to reside in properties that have large sections or are adjacent to hillsides and could be vulnerable to slips or flooding, so they are moving into the CBD – which is putting even more pressure on an already tight apartment rental market.
We are also seeing others downsize from larger family homes because they can’t afford to pay the mortgage with current interest rates and are selling up and wanting a rental property to live in.
In addition to this new domestic pressure we have migrants coming in who are also wanting to live in the central city.
There is significant scope to introduce other new technology to support the tenancy process including virtual viewings of properties, however, this is not well supported by current Government policy.
We know there is demand from tenants, particularly those moving here from overseas to be able to conduct a remote viewing of a new property, however, current regulations would need to be updated to accommodate this.
This would mean a prospective tenant could view a property from offshore and be able to lease the dwelling before they arrived. There would be a grace period included in case anything needed to be addressed when they inspected it in person.
