Covid19: Impact on Vacancies

We are hardly into the Covid19 crisis, but the rental market is already changing quickly. It would appear that many short term rentals such as Airbnb and Student units are being listed on the market for rent. There is daily increases in the CBD of Auckland and Wellington, while my charts for regions show big increases in the last week for all regions where tourism is a factor.

As you can see, inventory for New Zealand is up suddenly from around 8,500 to 9,500 in two weeks. Owners of short-term accomodation where the market just died are entering the rental market urgently.

This has led to supply meeting or getting very close to demand in more regions - even Wellington. I expect this to only be the first week because some owners are insulated due to individuals requiring isolation after travel, but those will dry up quickly, leading to more coming on the market. Hotels are also entering the isolation market, at low prices ($250/week) see here.

Inventory is now close to the expected balance in regions that were recently in very short supply, check out this chart:

So where does that leave all regions? Well the tab for “Surplus%" below suggests all the major regions are now getting very close to demand equalling supply. If there is more overshoot, expect prices to level off and maybe fall.

Jonette 2011