Hard times in housing

Saturday November 23, 2019 Written by Published in Weekend
Helena William. 19112255 Helena William. 19112255

Tough decisions for owners: To chase the quick buck or invest longterm?

Even in the tourism industry, there is a growing realisation that short-term rentals must not price locals out of the rentals market – after all, Cook Islanders are the heart and soul of Cook Islands tourism. Anneka Brown investigates.


Helena William has been searching for a place to rent for months now.

“What I’ve realised is it’s harder for locals to find accommodation than tourists because we just don’t make enough money to afford the rent,” the 19-year-old says.

“And when overseas workers come here, they are usually provided accommodation as part of their contracts.”

William is working fulltime. She’s reliable. Yet she is still looking for a home – and she doesn’t want to be forced to leave the island and look elsewhere, she says.

But the problem, for Helena and so many others, is that wages aren’t keeping up with rising rents.

There are two things contributing to the shortage of long-term rentals: the influx of overseas workers causing pressure on long-term rental accommodation, and local or overseas landowners turning their homes into Airbnbs with a manager to manage the revolving door of tourists.

For landlords, long-term tenants are their second choice these days rather than their first.

It’s hardly news: we all know the rise of Airbnb comes with high rates of return, as long as they’re regularly tenanted. The average tourist stays up to eight days on Rarotonga and spends on average $1887; on Aitutaki it’s $2990 over 10 days.

This means one Airbnb unit can return upwards of $50,000 a year – and that is why people are increasingly heading in that direction.


Jaycee Manuel, originally from the Philippines, has been searching for a long term one-bedroom unit, something basic just so he has a place to rest his head.

He’s been searching for an entire year and has been unable to find anything affordable.

“There are a lot of places available but they are too expensive and now rental homes has risen to $350 to $500 a week,” says Manuel.

Many people, he says, don’t make as much as the cost of a standard rental, now.

At the moment, his accommodation with friends is a temporary solution.

Owners who previously rented out their homes to families who lived and worked here are now renting them out for a few days at a time on Airbnb or other sites. Airbnb alone was offering 306 properties for rent last night.

Cook Islands Tourism has reported back the results of three studies: the International Visitor Survey, the Business Confidence Index Survey and the Community Survey on how people feel about tourism.

New Zealand Tourism Research Institute Director Professor Simon Milne, who oversaw the surveys, said: “We can clearly see a high level of support for tourism in the Cook Islands. People are proud to be living in a place that attracts tourists.”

But the community survey indicated long-term rental availability would be a challenge for the country.

More than 1000 people responded to the community survey, which showed the biggest demand for long-term rentals was from residents on Rarotonga.

“On Rarotonga we see many people are agreeing with the statement that it’s becoming harder to find long-term rental accommodation because of rental properties turning into Airbnbs. But I’m not sure this has reached a critical stage yet.”


When Te Tuhi Kelly arrived in Rarotonga, he struggled to find anywhere to call a home.

“Rental accommodation was becoming a lot more difficult to source and I was one of those who came out here on contract,” he says. “I can remember even then having to search high and low.”

The Progressive Party founder says there are a number of factors contributing to the lack of long-term rentals and it is not just a matter of pointing the finger.

“If we look back over the last ten 10 years, many of the overseas workers arriving here were in the tourist hospitality areas, education, some construction, consultants of various sorts working for Government and volunteers,” Kelly says.

One thing that we are seeing, Kelly adds, is that many of the Airbnbs are housing returning tourists, whose first introduction to the Cook Islands was a 7- or 10-day holiday at a resort.

But now, on their return to Cook Islands, they are opting for more affordable short-term accommodation.

“Overseas workers from the Pacific Islands or Asia tend to accommodate together – it’s cheaper, safer, better security, language, customs and family welfare being paramount.

“They will also accept mediocre accommodation which other overseas workers would not,” says Kelly.

The Tourism Corporation knows there is the danger of resentment if fly-by-night tourists deny homes to hard-working locals.

Tourism director of destination development Metua Vaiimene earlier called on government to provide public housing for those who can’t find anywhere to live, and said government should offer incentives so people would invest in building long-term rentals like apartments and houses.

He said rentals had become an issue for locals, who felt tourism was having an impact on housing availability.

“There is an issue of high rentals and it’s hard to find somewhere reasonable to live,” he said. “This has an impact to the community.”

It’s not in the tourism industry’s interests to price workers out of the housing market. Tourism operators need workers – and workers need somewhere to live.

“It’s a topical issue around the world and have seen examples of biggest places, like Barcelona where locals find it too expensive to live in their own countries.”

So the question for owners is: do you want to gamble on renting out your home to tourists, with all the management and maintenance and cleaning and risks that entails.

Or will you accept a slightly lower return from a long-term resident, secure in the knowledge of money in the bank every week to pay the mortgage?

Te Tuhi Kelly says we can ignore that question no longer.

“Short-term accommodation is having a down-stream effect,” he says.

“[It’s impacting] on the long-term accommodation prospects of locals, returning locals, contractors, overseas workers and young working couples in stable relationships flying the coop and wanting to set up their own homes.”

Helena William is looking for a long-term rental for two adults, paying $250 to $350 a week. Call Anneka at Cook Islands News on 22999 if you can help her.


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