Waiheke Island housing woes for renters, buyers as demand for property soars

Five homes in three years. Six, come May.

Rachel Cullens didn’t think it would be this way when she moved from Christchurch to Waiheke Island three years ago, leaving behind a tough decade of earthquakes and a call so close with the 2017 Port Hills’ fires the plumbing at her rental home melted.

Taking a long-advertised Waiheke Health Trust radiographer role she settled into a fresh start on the popular island just a 40-minute ferry ride from downtown Auckland.

But her new life was anything but settled and she moved house over and over and, from May this year, she again expects to join a long queue for rental properties – some substandard.

Rental and real estate agencies describe demand for Waiheke homes as at levels not seen before, and Real Estate Institute of New Zealand figures bear that out – 385 homes soldlast year, compared to 269 in 2019.

Median house values also surged in the past year, jumping between 15 and 19 per cent in Oneroa ($1.36 million), Onetangi ($1.14m), Ostend ($965,000), Palm Beach ($1.44m) and Surfdale ($1.03m), according to OneRoof-Valocity house price index figures.

Meanwhile median weekly rents range from $495 in Onetangi to $613 in Palm Beach, Tenancy Services’ figures show, similar to median rent in Auckland Central ($490), Mt Eden ($550) and Takapuna ($600).

Cullens, 44, owns a Christchurch unit with post-quake issues and says selling wouldn’t even cover a Waiheke house deposit.

In May she’ll again be looking for a new home for her, her flatmate, and cat Zulu, 14.

“I had hoped to come here for a less stressful life. It’s been really stressful. I never envisaged moving six times in three years.”

She’s not alone.

More than 30 families are on waiting lists for Waiheke rentals – an all time high, Auckland Property Management chief operating officer Bill Highet says.

Landlords are moving in themselves, many permanently working from home since last year’s Covid-19 lockdowns. Other homes are being snapped up by returning expats.

“And the market is buoyant, so others are looking to cash up.”

Most buyers are already living in New Zealand, wanting to work from home “in a nice environment” or channelling cash usually spent on overseas trips into holiday homes, Ray White Waiheke principal Matthew Smith says.

Properties are selling in a week, rather than four to six weeks.

“There’s never been as much interest. It’s almost out of control.”

Some desperate buyers are asking their lawyers to draw up sale and purchase agreements, despite sellers being clear they want to go to market.

“I’ve never seen such aggressive actions by buyers. They want to buy now and beat the competition.”

“Seriously wealthy” buyers told him their banks warned of charges for keeping money in their accounts.

“So they’d rather park it in property and get the capital gains.”

'Waiheke's a microcosm of the Auckland market'

Waiheke, like Mangawhai, Mt Maunganui and Pāpāmoa, is being targeted by an increasing number of Kiwis looking to snag a holiday home, OneRoof editor Owen Vaughan says.

On the other side were sellers encouraged by hot prices, and law changes giving tenants more rights and healthier homes.

“There’s huge incentive to sell. That’s great for them, but it does displace renters. And places like Waiheke are tight anyway.

“Waiheke’s a microcosm of the Auckland market – there’s a limited supply and huge demand.”

Rental housing inquiries have almost tripled on last year, Waiheke Citizens Advice Bureau manager Claire Stainton says.

In January 2019 there were seven, a year later six. Last month, 15.

She’s met tenants with no formal agreements or bond receipts, or who live in substandard housing.

“[One] lives in a ‘workshop’ with shower and toilet only. No agreement, and rent paid in cash. These substandard places are being rented, and with no tenancy agreements.

“If there’s a shortage, it leads to these problems. People will grab a rental that has no running water. They’re desperate for somewhere to rent.”

Waiheke housing ranges from “the sublime to the ridiculous”, Ahipao knitwear factory and cafe owner Esme Pfaff says.

She’s seen “rickety, falling down” places sell for $750,000, and her own time renting before buying ranged from “flash” to places where some of her six kids had to sleep in a hallway or tent.

She pays parking and ferry tickets for two Auckland-based staff, because they can’t find suitable island accommodation. Others are still flatting in their 30s because they can’t find a home.

High season workers used to be able to rent holiday homes in summer, but owners now accustomed to remote working have taken them off the rental market.

“It’s no longer a question of being in the office all the time, and I don’t think that’s going back.”

At Onetangi Beach, where one resident counted 22 vehicles with sleeping occupants one morning, she estimates just 10 per cent of seafront homes are permanently occupied.

“They have these old vans in front of them and they say, ‘Can you please move, because it’s ruining my view’. And then they expect to go to the restaurant and have someone serve them?

“If everybody treats Waiheke as a holiday island we’ll lose our sense of community. People working here need somewhere to live.”

Mum to the rescue – but not all so fortunate

It’s not just peak season workers affected.

Ostend Medical Centre GP Zoe Douglass began renting her island home three months before arriving from the UK in September.

“From what I’ve heard, we were fortunate to secure a year-long rental agreement. We are, however, facing further accommodation issues again after our tenancy agreement runs out as our landlord is planning to move back into the house.”

The anxiety around their ability to stay on Waiheke in the medium to long term is unsettling for her family and the practice, which is already losing a GP because of the lack of affordable housing, Douglass says.

Unsurprisingly, recruitment – they need a GP, practice manager and nursing staff – is “extremely challenging”.

The centre’s nurse leader Jessica Mead, who lives with her family in a converted shipping container as they save to build a house, says many patients live on boats or in vehicles, especially migrant workers.

“[At Onetangi] it used to be three or four, now there’s quite a few. And there’s quite a few tradies living in vans, because it’s cheaper.”

The Herald counted 15 vehicles being slept in at Onetangi Beach, and one at the nearby Sports Park, on Thursday morning. Of four occupants spoken to, all were holidaymakers.

Across the island in Surfdale hairdresser Christa Loisel, 43, has her plea for a rental on a sign in the salon window.

“I’ve got lots of contacts. But it’s impossible even for a local. If I didn’t have my family and my clients I would’ve been pushed off the island.

“I’ve had to move in with my mum, bless her. I’m so fortunate. People not so fortunate are living in their cars at the beach.”

'Old planning rules have got in the way of future use'

Waiheke’s housing pains aren’t new, although the pandemic-sparked increase in expat Kiwis coming home has exacerbated them, the island’s local board chairwoman Cath Handley says.

“It’s an issue every summer. People with holiday homes rent them out in winter and then take them over in summer.

“But that’s the time we have the most need in the hospitality sector. It’s pretty hard for itinerant workers who may be on minimum wage.”

Some large employers provide worker accommodation, but other workers must fend for themselves on an island which receives 1.3m visitors a year, a million of whom are Kiwis, mostly from Auckland, Handley says.

“We’ve got a lot of people living in cars and vans, and they’re not on holiday.”

Permanent residents are also affected by the lack of availability, she says.

And overcrowding can cause other headaches, such as for septic tanks on an island that doesn’t have a sewerage system.

Onetangi Sports Park, which has bathroom facilities, has been opened to those sleeping in vehicles, and there’s also the council-operated Waiheke Backpackers Hostel, Handley says.

The board’s three-year plan also addresses making it easier to allow “visitor units” -self-contained standalone buildings – to be rented to semi-permanent tenants.

Under existing rules they can only be let as holiday rentals.

“Old planning rules have got in the way of future use.”

She’s not sure how much that’d boost Waiheke’s rental stock, or when any switch might come – the next step is working with community groups and planners to make the change happen.

Those wanting to put down the most permanent of roots – buying a home – face the same increasingly tough challenge as those far beyond Waiheke’s shores, where national house prices continue their long-running upward journey.

“It’s really hard to buy a house here,” Handley says of what she describes as the other cause of Waiheke’s accommodation squeeze: “House prices. And that’s a national issue.”

Source: Read Full Article