The residential construction boom has now turned the rental market in the favour of tenants rather than their landlords, a realtor claimed yesterday.

As the Bermuda housing stock expands at a strong pace ? according to Coldwell Banker 75 new units will be released to the market this year on top of nearly 125 new condominium units that were added to the market in 2005 ? tenants have more choice on where to live which is causing rental prices in the middle of the market to even out.

Susan Thompson, Agency Manager at Coldwell Banker, said it is a significant turnaround from previous years when landlords putting property on the market were able to command higher rents because there was such a small inventory.

?People wanted prime spots to rent and in order to get them there would be bidding wars. Now that there is a larger inventory of property available, it has eased up,? Ms Thompson said.

?Tenants can now pick and choose more readily and therefore the prices being commanded a few years ago have softened up a bit,? she said, adding that she does not expect rents to rise in the next year or two.

As tenants have the luxury now to consider multiple properties, they have also become more fussy about where they live. There is also a growing trend for tenants wishing to have pets. Central locations and safe neighbourhoods are also important.

Ms Thompson said older, dated houses and apartments are being hit particularly hard due to competition with brand new units.

Construction costs for new or renovated units are also on the increase, since tenants are generally unwilling to accept properties that do not have air-conditioning and are demanding new major appliances and wood or tiled floors over carpet.

?Landlords, who are also responsible for maintaining the property, insurance payments, property taxes, etc. are finding it increasingly difficult to make a profit on rental investments. Coupled with rising interest costs on mortgages, many landlords are simply looking at recouping costs of their investments,? said Ms Thompson.

She notes that if a landlord puts a 15 percent deposit on an average two bedroom, two bathroom condo selling between $675,000 and $835,000, the landlord would need a minimum of $3,900 to a maximum of $5,600 per month at mortgage rates of 7.25 percent over 20 and 30 years.

The average rental price of a two-bedroom condo, however, is $4,200.

Coldwell Banker forecasts that the remainder of 2006 will keep pace with or likely exceed the demand of previous years which equates to the agency renting an average of one property per day.

Prices for the low and high ends of the rental sector are unlikely to be impacted by the increase in new development, she added.

Specialty rental properties such as waterfront or executive style housing remain in limited supply and Ms Thompson said that there is not a lot of possibility to negotiate when it comes to properties over $10,000 per month.

It is the same situation for properties under the $2,000 per month range which are still in high demand and extremely hard to come by.