Photo: Unsplash / Paul Kapischka
Fewer homeowners are becoming "accidental landlords" as the property market slows, new data from CoreLogic shows.
The term refers to people who end up renting out a property that they had intended to sell, because they could not find a buyer.
CoreLogic data provided to RNZ shows that in the year to June 2021, about 5.3 percent of all listings were withdrawn and then offered for rent, or 5500 properties.
But at the end of March 2023, and since then, the count for the previous 12 months had remained below 1600, or about 2 percent of listings.
CoreLogic head of research Nick Goodall said the fact people were opting to sell instead of rent more often as the market weakened was not what he had expected to see.
"My hypothesis for this is that when values are increasing, they can set a high expectation on a price they'll accept and if they don't get that offer, they're happy to continue riding the upswing and take it to the rental market in the meantime.
"Then when value growth is slowing or falling, the motivation to accept a price is higher so fewer properties are held and then taken to the rental market. "
Data earlier provided by Opes Partners showed that about 35 percent of homes listed for sale in Auckland and 45 percent in Northland were being pulled from the market without selling.
However, about 90 percent of Wellington properties were successfully sold.
Goodall said it was probably the case that the people withdrawing were mostly owner-occupiers who could decide to stay put rather than sell, not people who had to move because they had already bought somewhere else and were leaving the house vacant, or investors selling.
"I wonder if it also speaks to the fact it's quite difficult to get bridging finance. The willingness of people to go out there and buy a property before they sell their old one, this maybe proves that's quite low and people don't do it. They end up selling before buying or it's all conditional so you never actually have two properties which would be the situation that would lead you to be an accidental landlord."
People might also be less likely to buy a new place before they sold their existing one in an environment where prices were changing and they were not sure what they would get as a sales price.
Auckland Property Investors Association general manager Sarina Gibbon said the people she saw becoming "accidental landlords" were mostly going overseas for work.
