More properties being turned over to short-term letting and pressure from a growing tourism sector are getting the blame for a rent crunch in Queenstown.
Rental data from Trade Me this week showed the city was still the most expensive place to rent in New Zealand.
People offering properties for rent on the site were asking a median $790 a week.
That was up 12.9 per cent since January, and $240 a week more than the median Auckland asking rent.
The number of rental listings was down 18 per cent on a year earlier.
Auckland rents, meanwhile, were unchanged at $550 a week. The number of rentals available was up 11 per cent on last May. In the central Auckland region, available listings increased by more than a quarter.
Economist Gareth Kiernan, of Infometrics, said Ministry of Business, Innovation and Employment data, based on bonds lodged, showed double-digit percentage rental price growth between early 2015 and mid-2017.
The surge reported by Trade Me was not reflected yet, he said.
A report by Colliers this month suggested Airbnb was affecting affordability, as landlords discovered they could make more money by putting properties upf or short-term leases for tourists.
Infometrics data showed “whole house” Airbnb listings in Queenstown were equal to 14 per cent of the total housing stock.
The council is working on restrictions on Airbnb.
“The significant presence of Airbnb in the town could be having an effect on the availability of rental properties and has almost certainly contributed to the upward pressure on rents that we have seen over the last few years,” Kiernan said.
“However, it’s also worth remembering that Queenstown has had very strong growth in its population and economic activity, and growth in the town’s housing stock more generally has not kept up with demand.”
Economist Shamubeel Eaqub said things were “pretty grim” in Queenstown, with not enough housing supply, and high demand from locals, seasonal workers and visitors.
Andrew King, executive officer of the NZ Property Investors Federation, said there had always been a shortage of reasonably priced property in Queenstown.
He said there were problems because many of the residents were employed in lower-paying tourism jobs and did not have a lot of money to spend – while there was competition for property there.
Properties were snapped up by people who wanted to own a slice of Queenstown, rather than being bought by investors who could offer them to rent.
“It’s just a beautiful place and people do want to own there. I believe a lot don’t live there but just want to have a place to go to.”
Westpac chief economist Dominick Stephens this week said he expected the coming restrictions on foreign buyers to most affect the Auckland and Queenstown markets, where foreign buyers were most active.