It’s not all bad

The tourism slump could provide an opportunity for would-be renters:

Property investors are pulling properties from Airbnb to offer as long-term rentals instead.

New Zealand’s tourism industry has come to a standstill as the country responds to the spread of coronavirus.

A spokeswoman for Trade Me said usually 6 per cent of Trade Me rental listings were offered furnished. But since March 14, when the self-isolation rules were first announced, that number had increased to 11 per cent.

“This puts the total number of fully furnished rental listings at double what they were at the time last year,” she said. . . 

Economist Benje Patterson said huge number of Airbnb units had been put back into the rental market in Queenstown in particular. . . 

One reason for a shortage of rentals and homes to buy has been the number of properties being used for holiday rentals.

Landlords have been able to make more money with fewer hassles using the likes of Airbnb than they could with renting longer term.

“There are also large numbers of houses becoming available as people who have lost their jobs have moved out of rentals or have left New Zealand to head back to their home countries. I have seen reports of landlords throwing their hands up in the air and letting people break leases, rather than being stuck with someone who can’t pay rent. In other cases, there is evidence that tenants have done a runner.”

He said it was worrying because a big drop in yields for investors would push some to sell.

“A flood of forced sales, at a time when confidence to purchase a home is low, could cause severe instability to pricing. There is likely to be moves by the government over the next week or two to implement mortgage relief in order to prevent such forced sales. The last thing the government wants is for a mass rush to the exit push other homeowners into negative equity and compromise financial stability in anyway.” 

There probably wouldn’t be a lot of argument against mortgage relief for homeowners.

There might be more argument if it is extended to property investors especially when so much has been said about escalating property prices and the difficulty people have buying their first homes.