Christchurch landlords are ruthlessly exploiting the lack of accommodation by demanding extortionate rents.
Rents in Christchurch have skyrocketed. By April last year rents had risen by 26 percent while the national average was 4 percent. An average house was costing approximately $430 a week to rent - up nearly a $100 from the previous year.
The situation has continued to worsen since then, with the government consistently refusing to intervene and simply allowing the vampires of 'the market' to run amok. Meanwhile Mayor Sideshow Bob, like the good little government poodle that he is, has kept his mouth shut and done nothing.
But the greedy vampires are always wanting more blood and now they have spied an opportunity to capitalise on the housing crisis by renting out quake damaged houses at extortionate rates.
The houses are so damaged that the insurance companies won't touch them with a barge pole but according to Christchurch-based Real Estate Institute of New Zealand director Tony McPherson these wrecked and potentially unsafe houses are still 'habitable' - and extortionate rents can be demanded for the dubious privilege of living in them.
Real estate companies and landlords are clamouring for some of the action.
Real estate agent Phil Jones of Ray White told The Press , "You could get a 20 to 25 per cent return on your investment,'
Fellow bloodsucking vampire Mike Pero of Mike Pero Real Estate agrees.
He says: "What people are realising is that a house might have a crack through the foundation but otherwise be fine as long as we don't get another quake. ''
So everything is just fine apparently - as long as we don't get another quake. And what about the unfortunate people in the house if we do get another quake? Mike Pero is just interested in the cash, folks.
Pero, who has often been heard pontificating about the 'Canterbury spirit', says:
"As an investor, you could buy a five-bedroom house in Queenspark that had been written off by its insurers, make it safe, and put tenants in it, and you might be able to get $1000 a week. You've got to know the risks though, and know you won't get insurance and you won't get a mortgage on it. I would have no hesitation myself doing it."
And, Mike, you're going to guarantee that the vampires will make the houses safe? The same landlords that are renting out garages as accommodation? Why should they start behaving any differently now?
The Press laughingly describes these bloodsucking vampires as 'savvy investors...'
Hi Steven,
ReplyDelete'Blood Sucking Vampires'......a bit harsh to call Mike Pero and myself that
All of the 'as is where is' properties I have sold through my Realestate Company have yielded a return of between about 12 to 15% and have given the vendors, many who are elderly a chance to move on.I have contacted the Press to say my quote of 20 to 25% return is misleading. This has been achieved by some vendors selling privately for far less than we could have achieved for them.To get a $1,000 a week you would have to invest betwwen $250,000 to $300,000 and make sure it was up to scratch, at a 17 to 20% return. Not that much when you could lose the lot in another big quake.The sales that we have made are good for the community.The Vendors can afford to buy again, the Investors receive a good return on their very risky investment.The big winners are the new arrivals who can rent nice modern homes with all the comforts at fair market rents. Other good returns have been made by renting to the 'Holiday Home' market.
You can deny it as much as you like but the reality is that the housing crisis in Christchurch is being ruthlessly exploited by real estate companies and private landlords and you have been able to get away with it because the government has allowed you to get away with it. To suggest that you are doing the community a favour is derisory.
ReplyDeleteWhat exactly is a 'fair market rent' when rents in Christchurch have skyrocketed? Or are you fine with this? It seems it is just peachy with your colleague Mike Pero who thinks it is 'fair' to ask a $1000 a week for a uninsured, quake damaged home.
There is no social conscience evident here - just rampant greed.
I personally don't know of any properties rented at that price Steve........must be pretty flash.The properties I have sold have been re let at the same price as before mostly in the $300 to $400 range. The thing is if someone is contemplating selling their damaged home they should seek the help of a Realesate professional.
DeleteI have saved many vulnerable quake stressed people tens of thousands of dollars in that regard. They were offered $85,000 privately and I achieved double that in some cases.
Since the quakes Realestate Companies have been struggling and running at a loss in most cases. Many people seem to resent it when we are back in profit mode again.
Believe me Steven it takes a lot of hard work to succeed in Realestate and most of the people I know in the business are hardworking honest people, working in homeowners best interests. and giving back to the Community through fundraising and sponsorship
Perhaps you could address the issues.
ReplyDeleteWhat is a 'fair rent' in a city where rents have skyrocketed over 25 percent in the past year? This is a result of real estate companies and private landlords exploiting the housing crisis and the government failing to intervene. Are you OK with this?
Helen Gatonyi of the Tenants Protection Association said yesterday that she was aware of many tenants who had suffered as a result of living in quake-damaged homes.
'"I just felt sick when I read about it. Some people think it's OK to make a buck at any expense, but it's not OK when your investment is more important than the wellbeing of citizens."
That is the reality in Christchurch and you have yet to acknowledge it.
As for renting out houses at $1000 a week - you should talk to your colleague Mike Pero about it, as he's the one who said it. Or are you denying that as well?
I am not really qualified to comment on fair market rents as I specialize in Residential Sales.
ReplyDeleteHowever if there is a shortage of broccoli, tomatoes or petrol the prices of these items increase too.That is the way of the world, supply and demand.
Most people who own rental properties are lucky if they get a 6% return on their investment.If you then factor in mortgage repayments, maintenance, increasing insurance costs and pay a realestate company you could be lucky to get a 4% return. This is not a particually viable investment these days.A tenant only needs to miss a payment and some landlords have trouble paying the mortgage.Property Management is very stressful and companies are obliged to work in the landlords best interests.
There are now better quality houses coming into the rental market with double glazing and heatpumps.They maybe damaged in the foundation but are generally warm comfortable homes.
Being able to buy now at land value offers a good return but there are big risks and it is not for the faint hearted.I think a 12% to 15% return is fair. Example a $150,000 3 bedroom warm home with heatpump rents at $400 pw in the Eastern Suberbs with very happy tenants. I applaud these pioneer investors having a go.
Realestate Companies are offering solutions to people with quake damaged homes and making available good quality rental accomodation to our vibrant new arrivals who are going to high paying jobs rebuilding our city of Christchurch.
If you read your blog again Steven Mike Pero said "you MIGHT be able to get a $1,000 a week."
What are you saying? Landlords are doing it tough?! You must be joking!
ReplyDeleteWhat about people living in overcrowded conditions? What are about people living in caravans and garages? This has occurred directly because of landlords exploiting the housing crisis in Christchurch and the failing of the government to do anything about it.
But you casually dismiss this as just the outcome of 'supply and demand' - this, according to your logic, justifies the extortionate rents that are being demanded. All your demonstrating is that 'the market' benefits a few at the expense of the many.
The market is unregulated and rampant greed has become commonplace to the extent that people like you try to defend it. find this appalling and simply unacceptable.
A rent cap is an obvious solution to the activities of the rental market’s vampires. It would undermine a situation in Christchurch where landlords and real estate comapnies believe they are entitled to profit from property in a completely unregulated manner.
Most landlords buy a rental property as a superannuation scheme so they don't have to rely on the government to look after them when they retire.By the time they pay all expenses they mainly just break even or run at a loss.When they retire and the property is finally paid off then they have some disposable income.Trade Me reported an average rise in Christchurch rents on it's website of 26% in the past year but that figure is skewed by the new and growing market for short term furnished homes operating more as motels. In the Burwood, Avondale, New Brighton area where I work rents have increased by 9%
ReplyDeleteI am sorry but I don"t agree that a housing crisis has been caused by landlords or the Government,if there were no landlords where would people live? Landlords always do it tough, and work very hard to be able to afford more than one house and keep up the mortgage payments.As with tenants there are good and bad landlords. Most of the ones I know are good hardworking people and in many cases they allowed some tenants to live rent free in the early days of the earthquakes while they still had to pay the mortgage bills. Far from the Bloodsucking Vampires as you descibe.
Goodby.
Phil is so far out of touch with public opinion on this issue as it is possible to be. Basically he likes to think that his profiting is effectively a public service. (He's just a really great guy!)
ReplyDeleteThe fact that a drowning man might grab onto a shark that swims by, in an attempt to save themselves is being touted (by phil and co.) as a purposeful contribution by the shark to save the drowned mans live.
Yea Right.
Look you capitalist pigs, if you are going to make a squillion out of the earthquake, why don't you just come out and say that. Are you really all so shy that you have to dress yourselves up some kind of disinterested 3rd party.
No-one believes anything you say anyway.
Why bother pretending.