Data released from Trade Me shows the region has the lowest median weekly rent of any region around the country, but was one of the only ones to have an increase in demand for rental properties in May. The demand is also pushing up rents.
Trade Me Property sales director Gavin Lloyd believed this was happening due to growing living costs and it being a good time to sell property in Southland.
He said the region saw a 4% drop in the number of rental properties on the market in May and an 8% rise in demand when compared with the same month in 2021.
This bucked the nationwide trend of rentals on the market increasing by 12% in May, he said.
"This made it one of only two spots to see a year-on-year increase in demand [along with Canterbury].
"The combination of supply dropping and demand growing is putting pressure on the market and causing Southland rents to increase."
Despite stronger growth in rents during the past year, Southland’s rents remain well below the national average. And it continues to be the cheapest place in the country to rent.
The median weekly rent in the region was $370 in May 2021 and in May 2022, it was $410 — an increase of about 10%.
"Southland has the lowest median weekly rent of any region around the country, and the increase in demand for rental properties may be due to Kiwis looking to move to the region to combat growing living costs."
T & T Property Management owner and property manager Tony Mennell said there was an increase in the number of people looking for places to rent in the region.
"The rental market has been pretty good in Southland in recent years as we have noticed a strong demand for rental properties in the region.
"We’ve noticed, as well, an increase in the number of people moving to the region — more people are coming to the property views and we’ve been able to manage the rentals relatively quickly, which shows there is strong interest."
Since the Covid-19 pandemic, the profile of tenants had changed, as there were not as many students as there used to be. There were now a lot of overseas people bringing their families to Invercargill. That had not been an option for them for the past two years, he said.
However, the main reason for the increase in demand was the growing number of properties for sale in the region with more people needing to move out of their rentals.
"It is fair to say that 50% of people attending the views at the moment are saying their properties were put on the market."
Trade Me figures show in May, Southland saw a 26% increase in the number of properties for sale in the region when compared with the same month in 2021.
Professionals Real Estate general manager Lachlan Shannon said his company had felt strong activity in the building industry and a slight increase in migration of people to the region.
"People are seeing Southland as a viable place to live. We certainly feel this on the sales part of our businesses. Many people are considering Southland as a great place to live and to invest. So this is very encouraging for our local economy," Mr Shannon said.
