There were huge residential rent increases in many parts of New Zealand over the 12 months to the end of March, although rent increases were much more subdued in Auckland and Christchurch.
The percentage increases in average rents surged into double digits in many centres between the first quarter of last year and the first quarter of this year, according to interest.co.nz's analysis of bond data collated by the Ministry of Business, Innovation and Employment's Tenancy Services division.
Those areas with double digit percentage growth were Rotorua, Hastings, New Plymouth, Palmerston North, Whanganui, Porirua, Upper Hutt, Lower Hutt, Mackenzie District, Rangitikei District, Dunedin and Invercargill.
However rental growth was much more modest in Auckland, where the average increase was just 3.6% for the region.
Within the Auckland region rental growth between the first quarter of last year and the first quarter of this year ranged from 0.2% in Franklin to 4.3% in the central Auckland suburbs.
In Christchurch the average rent increased by 2.5% over the same period.
Across the entire country the average rent was $461 a week in the first quarter of this year, up $23 a week (+5.4%) compared to the same period of last year (see the table below for the average rents and annual percentage changes in all districts).
The smallest percentage increase over that period was in Franklin on Auckland's southernmost flank where the average rent rose by just 0.2%, while the biggest percentage increase was in Mackenzie District in the South Island, where it rose by a whopping 54.6% and that followed a 21.6% rise in the previous 12 months (Q1 2018 to Q1 2019).
The most expensive place in the country to rent a home is the Queenstown-Lakes District where the average rent in the first quarter of this year was $650 a week, followed by Auckland's North Shore at $602.
The cheapest place to rent was was the South Island's Rangitikei District where the average rent was $275 a week.
Rangitikei was the only district in the country where the average rent was below $300 a week.
However the first quarter figures are overwhelmingly based on rental bonds received by Tenancy Services prior to the commencement of the COVID-19 lockdown.
It is too early to say what effect the lockdown may have had on rents around the country.
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| Average Residential Rents Q1 2020 | ||
| District | Rent $ | Change from Q1 2019 |
| Whangarei District | 424 | 6.7% |
| Rodney District | 542 | 3.2% |
| Waitakere City | 526 | 2.8% |
| North Shore City | 602 | 3.8% |
| Auckland City | 546 | 4.3% |
| Manukau City | 541 | 2.1% |
| Papakura District | 509 | 0.5% |
| Franklin District | 482 | 0.2% |
| Auckland Region | 544 | 3.6% |
| Hamilton City | 433 | 7.1% |
| Tauranga District | 505 | 5.3% |
| Rotorua District | 415 | 16.8% |
| Napier City | 432 | 6.7% |
| Hastings District | 406 | 12.8% |
| New Plymouth District | 391 | 10.1% |
| Palmerston North City | 365 | 19.2% |
| Whanganui District | 350 | 19.9% |
| Kapiti Coast District | 463 | 9.6% |
| Porirua City | 517 | 11.2% |
| Upper Hutt City | 470 | 14.0% |
| Lower Hutt City | 495 | 11.9% |
| Wellington City | 584 | 8.6% |
| Wellington Region | 558 | 9.2% |
| Ashburton District | 350 | 4.0% |
| Banks Peninsula District | 426 | 9.5% |
| Christchurch City | 402 | 2.5% |
| Mackenzie District | 391 | 54.6% |
| Rangitikei District | 275 | 13.2% |
| Selwyn District | 461 | 1.8% |
| Timaru District | 333 | 4.6% |
| Waimakariri District | 407 | 2.0% |
| Canterbury Region | 399 | 3.0% |
| Nelson City | 421 | 8.5% |
| Queenstown-Lakes District | 650 | 7.2% |
| Dunedin City | 398 | 13.7% |
| Invercargill City | 306 | 15.1% |
| New Zealand | 461 | 5.4% |
*This article was first published in our email for paying subscribers. See here for more details and how to subscribe.
41 Comments
To quote one of the best Australian movies ever made, "The Castle" ........ ya dreaming mate !
Bond data mate so the dream has already happened.
Nearly 20% increase in rent across Palmy, never seen anything like it - thank labour government my cashflow has never been better
Simon, quoted from above ....."It is too early to say what effect the lockdown may have had on rents around the country"
Hi Simon,
Well noted.
The growing student population is what's driving up rents in Palmerston North.
And rents are damned high there given the standard of rental accommodation = grotty student flats.
PN is a fantastic city for property investment...... A goldmine for astute landlords.
TTP
I hope you guys are not expecting the overseas students to come back at any time soon, because they won't be able to until 2021 and that the forecast from all universities.
Greg. Developing story line to investigate in Trademe rental listings?.. I am seeing about 50% increase in available listings in last four weeks in Auckland region And Auckland city(1700 increasing to 2400 +.)Is there any hard data available? Interested to see.
Yep. If interest could provide a piece on that it would be good. I am just ready to make another little contribution....keep the punters happy!
The question is, why?
We haven’t seen double-digit growth in population, or in wages. The market is not working. It’s important to get this right, because it affects our whole economy — I don’t believe we have a low-wage problem so much as a high-rent problem.
Anyway, those Queenstown rises are an artefact now for sure. We’ll see about the rest in due course...
Because government policy has been to drive out private investment from the housing market, this is simply a measure of their success.
Private investment has probably been leaving that market, leading to a shortfall. And if the government continues on this course I predict the next major development will be rental properties that remain empty because the private investor can no longer afford the risk of renting. The government will then cry 'market failure', or something similar.
Could this be higher end ex Air BnBs renting at a higher rate. Areas showing massive rent growth have not discovered gold, far from it, their tourist economy has been destroyed.
I might move to Queenstown and work remotely from there. Picturesque scenery for bargain accommodation. It'll be quiet there too, which I like.
I might move to Queenstown and work remotely from there. Picturesque scenery for bargain accommodation. It'll be quiet there too, which I like
Spooky down in the town at night I suspect. Bogan badasses from the region will come into town and drink in their cars. They used to go into the bars just to pick a fight.
Well I come from a bogan southern town, so I suppose it could wind up being deja vu. But I won't be going out for a weekly fight outside Fergburger on a Friday night.
Noooo not CHCH, surely? CHCH is growing rapidly...
Were's the MAN when you need him?
The Boy will be busy working on some of his so called stock trying to get them fit for sale as hard times are a coming. Having too many eggs in one basket is not a smart position to be in. I tried to tell him but he always knew best. That is why he has been so grumpy lately. He should be thanking Labour as they have saved the old boomer from getting sick from the virus. National would not have done so well.
Fortunately he always buys well under true market value, so he shouldn't lose any capital when selling even in a severe downturn.
Psst, I've got a nice bridge, one lady owner, never raced rallied or rolled..
Yes he is certainly a legend in his own mind.
Comments so far have not mentioned influence of Accommodation Supplement.
Reality is that accommodation supplements are currently distorting rents and will continue to do so in the future even as unemployment grows. There has been upward pressure on rents as WINZ meets increases in rents as long as they are "in line with market rents" - a circularity situation and that doesn't look like its is going to broken with more in receipt of benefits.
I expect the anti-landlord element on this site are going to choke on this.
You could probably count me as one of the anti-landlord brigade and I agree totally. Accommodation supplement is a massive, market-distorting suckhole of taxpayer money straight into landlords’ pockets. Stupidest idea since ‘market rates’ for state housing.
The biggest reason rents go up is to cover Rental agencies fees. Rental Agencies are out there convincing landlords that they can't or shouldn't be dealing with tenants directly. This fee the agency charge simply gets added onto the weekly amount the landlord wants/needs, so the tenants are paying 10% more than they should. Landlords don't need an agency to handle tenants, they can do it themselves and until recently they always did. Experience has proven that by forming a personal bond with your tenant, they are less likely to be late on rent and they will look after the property better.
Agree, in my experience as a tenant most "property managers" are hopeless or downright negligent. I remember in one flat the shower lining had started leaking quite badly, so I rang up the manager and let her know about it. It was running through a channel and under the vinyl flooring so could do some unnecessary damage if left unchecked. She basically fobbed me off, said she'd let the LL know but money's tight you know etc etc. A week later I ran into the landlord at the supermarket, he lived locally, and asked him if he'd had a chance to get someone to look at it, as the vinyl was now lifting and the floor softening. He hadn't heard about it all! He came over that evening and took a look, and had a tradie in the next day to sort it out. Felt a bit sorry for the guy as the PM clearly hadn't bothered to let him know.
I live in Auckland CBD - been with my landlord for just over 4 years now. Given the apartment and rental stock that has come into the market, with more to come, the landlord has agreed to discount my rent by 20% but only if I fix for 12m.
Since I have been with them, I only had on small rental increase, from 580 to 600/week about a year ago. Starting this May, I will be paying 480pw.
I would say I am a solid tenant. Never missed a payment, caused trouble or damage. Only had the washing machine replaced, but that was like 15 years old.
Thanks for that anecdote.
As I have said before, prices and rents in the CBD will dive.
Your landlord is clearly astute.
Win, win. Well done.
I'm simply amazed at how much forced positive sentiment is still being put out there, instead of being objective. It's about keeping confidence up, which is necessary for the market and industry to keep afloat, I understand that; but I mean, it seems Bindy Norwell is incapable of saying anything negative about the outlook, even amid a global pandemic and some of the worst forward-looking global economic data in about a century: https://www.stuff.co.nz/life-style/homed/300000731/six-days-of-lockdown…
The spruikers are back in full force!
Dp
.
Remember this was asking $1200pw
Now reality has hit, only $550!
Rents ain't going to go up anywhere for a wee while me thinks..
https://www.trademe.co.nz/a/property/residential/rent/wellington/wellin…
gingerninja | 10th Apr 20, 10:45am
10
up
And in Wellington, the listings of overpriced ex Air B&B's has begun https://www.trademe.co.nz/a/property/residential/rent/wellington/welling...
The Man is certainly not preparing his rentals to sell, as firstly they are all fully rented until next year and secondly because they are giving far better returns than anything else, by a long way.
ChCh rents haven’t been escalating and that is because it is the most stable market in the country, been saying this for years.
Personally believe ChCh is going to recover a helluva lot better than most other parts of NZ as it is a desire able place to live.
Yes there will be redundancies in hospitality but the building industry will be ok.
Prices of building will certainly not be dropping, quite the opposite.
Landlords have been hit by a government that is not that user friendly but we are continually getting pay rises due to fixed rate loans expiring and interest payments decreasing significantly.
This past year our interest payments have decreased by over 35k, which isn’t too bad, with more on the way.
"Desirable place to live." Pull the other leg the Boy. Your very small population and the price of your housing certainly proves that comment to be very far from the truth. In fact you will become even less relevant as more people than ever will move for work and business opportunities. What little tourism you had is gone for a very long time.
Gordon I think you have some infatuation with The Man’
I am not sure that it is overly healthy as I am heterosexual and happily married.
The jealousy element is also questionable as to being healthy for you!
ChCh has the second largest population in NZ so you have no idea about what you are stating
Why the low house prices The Boy? Some rural areas in the North Island are obviously far better places to live than poor old Christchurch.
Gordon, what low prices are you talking about?
The rents in ChCh for professional landlords are a helluva lot better than what they are than in Auckland and Elsewhere?
Are they achieving rents at the moment of in excess of 6% p.a.?
Admittedly you pay a lot more for houses in Auckland than in Christchurch, but we all know that is due to the overseas buyers that we all know exist there now.
There would be more overseas born people in Auckland than NZ born buyers and hopefully it doesn’t transmit to ChCh, however I wouldn’t guarantee that, looking around.
If you want to pay $800k for a house in Auckland when I can buy the same thing for half of that, then I say go for it.
Real Estate investing in ChCh, has made us wealthier than I could’ve ever wished for 15 years ago.
Don’t bother replying Gordon, because it will be the same of dribble about ChCh, when you are totally incorrect.
Soon be your afternoon tea time
Hell CHCH is just a metropolitan version of Tokoroa or a big brother of Invercargill.. Standard issued clothing items are black Jean and black bomber Jacket.
And number one haircut.
I think you have some infatuation with yourself. Who else would call themselves ‘the Man’ but a self-infatuated person!
"fully rented until next year"
Fully rented until your tenants start going broke. Fixed it for you.
It feels like this news should be wrapping fish and chips......
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