Rents Barely Cover Outgoings

People don't buy these places expecting to do more than cover their outgoings, said another agent. Rents have got to rise, but they can't rise enough to give the kind of return needed to make these properties attractive.

"Take the kind of house you'd pay $60,000 for. You've got to get $150 a week to cover your outgoings (at 12.5%): and who's going to pay that kind of rent?"

And if the property is listed as an apartment house because of the number of flats in it, or because it is two-storeyed, or because all the flats do not have a separate outside entrance on the ground floor, the local body may well require upgrading to higher fire-prevention standards which could lead to the expenditure of thousands of dollars.

So the bigger blocks, too, are also less popular with investors.

Miss Brown, VUW accommodation officer, said that students had to be realistic and realise that they were competing for flats with young workers, who could pay more.