Rentals: Bidding wars?

[A.C. Slater]

Here's the quick story: Saw a place on TradeMe in Johnsonville. Loved the photos -- nicest place we've seen at our price point in six months of looking. The listing specifically said no private showings, and anyone who didn't have a complete application would be ignored. One hour open house on the weekend only. We knew it was going to generate a lot of interest, so we got in our application straight away, sight unseen.

Property owner responds right away, touched by the little note we included with our application, and offers to show the property to us privately the next day. We accept, we show up, we love the place, she loves us, and she says she's keen to just let us have the place and skip the headaches of a public showing. Says the tenancy application will be coming the next day after reference check. Happy days! We win!

Next day, we ask for the tenancy agreement, and she tells us that she's been put in a tough position. She loves us, wants us to have the place, etc., but she had another couple who was very interested and offered $30 more per week in rent (on $495 pw), and asks if we can match that. It was at the top of our budget, so we declined. We were really, really disappointed, because we loved this place. She wrote back and said she understood, and she was now in a tough position, stuck between her heart and her wallet.

I wanted to call her bluff, but I knew that was just a sure-fire way to lose the rental. The place was really nice, and underpriced based on our experience. It was completely believable that someone would pay $30 more in rent.

So I agreed to meet her halfway, adding $15 to the rent, and she accepted.

Lots of our kiwi friends are angered by this, saying we should report her to the tenancy tribunal. Is this illegal? Just dodgy? Or is this just a demand-driven free-market doing what it does best? (or worst, depending on which side of the table you're on)

[Oregonkiwi]

Or is this just a demand-driven free-market doing what it does best? (or worst, depending on which side of the table you're on)

This one, I think. I don't know about the Wellington market, but here's a (2 years old) article about it happening in Auckland:
http://www.nzherald.co.nz/nz/news/ar...ectid=10782588

[A.C. Slater]

That's what I was afraid of. It's so frustrating, because there's always someone out there who will take the rental. It's just a very inelastic demand, it seems. Our rental is back on the market, for $520, which is $20 more than what we're paying now. Why? It's still 13 degrees in the house on a summer day, without a trace of insulation or hope of getting a heat pump, but apparently it's worth more now, and they're going to get it, because the response has been huge.

I just wish I could attend the showing so I could shake these people and say, "you're getting ripped off!!!!!!"

[newarrival]

Our son has just come back from a week in Wellington,looking at potential rooms in (student) flats, and it is exactly the same there..., loads of people looking, some of them had already been let although the ads were still there and there still was a viewing going on...., but 'oh, a friend of us has taken it after all...'. It is a high demand out there, and they will take whatever they will get! Same thing happens in Dunedin, and some of the flats there are really, really grotty, humid and cold- but they still put the price up every year, even if it is 'only' by $5.00/ week.

Not at all fair, and, in the case of the rental you will be leaving, not even a chance to get the landlord/ manager to put heating in, because someone will come along and just take it as it is!

[72andsunny]

I feel for you guys. When we first moved here, there was a small rental shortage (it gets that way whenever the weather is nice--show up in winter and everyone is renting something out). We had a container collecting storage fees at the port and the real estate agent knew we were in a hurry. I'm sure there was nobody else interested in the uninsulated place we rented, but we were made to believe we had to act at that exact moment. If there were actually someone offering more money, I don't know what we would have done. We ended up moving into a place with cat stains on the carpet (cleaned twice the day after we moved in when we complained), and then were charged for cat stains on the carpet when we moved out. We don't even own a cat.

[RedVee]

Do your research on here http://www.dbh.govt.nz/market-rent

Then you will have an idea if the rent is at the top (or beyond) of the quartile for your area and number of bedrooms.

You can agree a higher rent if you need to to secure the property, then go to tribunal later. Not an option I would recommend though, especially if you want to stay longer than one periodic tenancy. And the tribunal probably won't get into differences of around $20.

The first thing to work out is whether the property is actually good value, so it is just your perception about cost/your budget getting in the way.

The second consideration is making sure you have a long,long list of property. Agents and owners can sense desperation so you will need to tough it out with them if you are not going to be price gouged or end up in poor accommodation. If everyone walked away from the awful stuff, landlords would have to invest. Widen your search and travel more if you have to - you will recover your travel costs usually by paying lower rent, and get more overall for your money.

Although I agreed to the rent here, which was just on the upper quartile, it was on condition that the heating was upgraded to match the asking price. The agent knew I was informed and also that I would be a good tenant, both of which helped.

Keeping the house well presented will also help at renewal - they tend not go hard for an extra few bucks if you are a good tenant. RV's have dropped slightly up here in Whitby/Plimmerton/Paremata/Cambourne so that should keep prices keen.

[DMS]

Is this normal or is this in response to the recent changes that all home purchases need to have 20% down or is this new policy making the renting situation worse? Given the average cost of home versus income, I can't see how this won't eventually begin to depress the housing market. Could this potentially be the long term policy change that starts to deflate what appears to me as a hyper-inflated housing market, potentially, especially in secondary markets and rural, non-scenic areas? As I get ready to pack for my trip to Auckland tomorrow, my only real concern outside of distance from family in the US, is the housing market. Reading things like this really make me appreciate my setup and also kind of puts emphasis that as I near the end of my two year plan is to make buying a property of my own a priority, even if it's a condo if I decide that NZ is where I want to make a permanent home.

[A.C. Slater]

I think you're exactly right. The tighter lending standards, which, among other things, were intended to put downward pressure on housing prices by cooling off the market, have not only failed to accomplish that, but have also succeeded in pushing rental prices up, as more and more people are disqualified from buying.

I find the housing market and inventory just really depressing, and I try not to think about it too much. You have to get to a point where you accept it as the new normal, and you have to stop thinking about what you're paying and for how much. I'm glad we got something we really like, even it it's not the most budget-friendly option. Our days of paying $500 a week to sit in 13 degree temperatures, watching our breath waft through the lounge are soon coming to an end, but I'm sure a new our new place will have its own can of worms.

... and I really hope it isn't an actual can of worms. But I wouldn't be surprised.