Where are all the rentals?

Economist Benje Patterson has run the numbers and confirmed the local housing rental supply is shrinking, cranking up pressure on the employment market.

The Arrowtown-based analyst was commissioned by Queenstown Lakes District Council (QLDC) to write the quarterly labour market snapshot.

Data from Ministry of Business, Innovation and Employment rental bonds, show close to 100 fewer rental homes available in November 2022 versus November 2021, he says.

And TradeMe figures show a 49% drop in rental listings in the district from December 2021 to December 2022.
But nailing the cause is challenging.

Building consent numbers show the rate of construction in the district over recent years should be more than enough to keep up with population growth, Patterson says, with about 1,081 more homes consented last year than were needed to meet population growth demands.

Despite a recent increase in the number of short-term stay accommodation listings in Queenstown Lakes, listing numbers remain lower than before the pandemic.

Accounting for new housing stock and new short-stay accommodation listings, data suggest about 649 new houses were built above and beyond the needs of both population growth and short-term stay demand.

“The question we don’t have a certain answer to is, what are these new houses being used for? It is likely many are unoccupied and have been constructed as holiday dwellings or homes to retire to in future,” he says.

“The most recent data available on unoccupied dwellings, from 2018, tells us approximately 27% of all houses in the district are unoccupied.”

Queenstown Lakes mayor Glyn Lewers said this data provides important insight to support decision making and fuel a united focus from council, local businesses, organisations and Government towards solutions.

“We are acutely aware of the related impacts on the labour market and local businesses that is linked with our district’s housing challenge,” Lewers says.

“The report tells us that while building houses is an important piece of the puzzle, building more will not solve the problem alone. We must tackle this from many angles and in partnership with those who can help our community realise sustained change in the makeup of our housing market, and that’s what we’re focused on.”

Queenstown Business Chamber of Commerce Acting Chief Executive Sharon Fifield said housing is clearly a growing concern amongst the myriad of challenges businesses already face in attracting and retaining staff.

In a recent Chamber survey, one in three Queenstown businesses said the housing situation represents their biggest barrier to achieving optimal staffing levels right now.

And almost three quarters of respondents said the availability of accommodation for staff is more than just a minor issue for their business.

“Recognising that many employers are now needing to consider providing worker accommodation as part of their longer-term workforce strategy, the Chamber will soon hold an information series on all the things employers need to consider when housing staff, as it is complex,” Fifield says.

Meanwhile, the labour market snapshot data also shows job numbers in Queenstown Lakes district has recovered to close to its pre-Covid peak in December 2019.

However, the labour market make-up shows an uplift in industry servicing a growing population, while hospitality continues to struggle to serve returning tourists with 1,200 fewer staff than in summer 2019/20.

The full report is available on QLDC’s website.