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Comments on: Accidental landlords and rent http://www.tvhe.co.nz/2009/02/26/accidental-landlords-and-rent/ The Visible Hand in Economics Thu, 01 Nov 2018 11:20:43 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Matt Nolan http://www.tvhe.co.nz/2009/02/26/accidental-landlords-and-rent/#comment-16644 Thu, 26 Feb 2009 09:37:06 +0000 http://www.tvhe.co.nz/?p=2993#comment-16644 Hi Dave,

Thanks for the interesting comments.

I have actually heard the effective interest rates are a strong explanatory variable for rental changes in the past – it would be interesting to have a look over the data with it. If that was the case we should see growth slow even more rapidly heading forward – which seems a bit difficult to believe 🙂

]]> By: Dave http://www.tvhe.co.nz/2009/02/26/accidental-landlords-and-rent/#comment-16538 Wed, 25 Feb 2009 23:45:28 +0000 http://www.tvhe.co.nz/?p=2993#comment-16538 I have been watching (1) in action in Christchurch. You see a property on the market to sell for six months to a year, then the owner gives up and it appears on the rental market. The accidental landlords often start by setting a rent that will cover their mortgage. The property then sits vacant for weeks if not months, gradually reducing the rent until it clears. This has resulted in a record number of vacant rental properties in Christchurch, which has reduced rents considerably. I hear the market is not quite so loose in Auckland but rents there have been almost static since 2008.

Your (2) and (3) are non-starters, look at the trends of house prices and interest rates vs. rents over the last decade. Rents only rise roughly in line with wage inflation. If people can’t afford the rent they go back to live with Mum&Dad, or start couch-surfing. (4) is a factor but landlords hate to reduce rent for a sitting tenant. We have had a token 2% increase in the last 3 years which given wage inflation is as good as a reduction.

]]> By: Sell | Vehicle Purchase http://www.tvhe.co.nz/2009/02/26/accidental-landlords-and-rent/#comment-16534 Wed, 25 Feb 2009 23:32:00 +0000 http://www.tvhe.co.nz/?p=2993#comment-16534 […] Accidental landlords and rent | TVHE Share and Enjoy: […]

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