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Departments/Research By Matt Curtis, BRANZ Senior Research Analyst
Building to rent
As demand for rental housing will only continue to climb, new ways to match this with quality stock must be found. One possibility is the build- to-rent models operating successfully in the UK.
HOUSING AFFORDABILITY is a well identi- ed issue in New Zealand. Using the median multiple*, a relatively simple to understand measure of housing a ordability, housing in 41 of the 67 territorial authorities would be classed as severely una ordable.
Sub-par rentals and no incentive to improve
In addition, pressure on the rental housing market means that previously untenant- able housing may be becoming part of the rental stock. This is particularly concerning for desperate or vulnerable tenants who may nd themselves with no option but to occupy sub-par housing.
Over half of the current rental stock requires less than $5,000 worth of minor repairs to bring it up to the same standard as its owner-occupied counterparts. Given the rapid rate of in ation in house prices for much of the country over recent years, this suggests that it should be well within landlords’ means to improve these houses. The main barrier is that improvements are unlikely to be recouped through increased rents.
in rent. In addition, many tenants did not consider other costs such as electricity and transport in choosing their current residence. This led to a lack of incentives for landlords to invest in their properties.
225,000 more rentals in 25 years
BRANZ projections suggest that the rental stock is likely to grow in number over the next 20 years. The projections estimate that, by 2038, there are likely to be an additional 225,000 rental units over the 2013 Census.
Many of these additional units are likely to be occupied by those over 65 years of age. BRANZ estimates that the number of people 65 years or over in rental accommodation is likely to more than double between 2013 and 2038.
Potential solutions to improve rental stock
Potential solutions to overcome the potential barriers to an improved rental stock include: ● a build-to-rent scheme
● real estate investment trusts
About half of the tenants surveyed said that they could not a ord to pay any more
● energy performance certi cates. *The median multiple is the ratio of the median house price to the median gross (before tax) annual household income.
86 — April/May 2018 — Build 165