The national median rent for residential properties increased by $40 a week in the 12 months to September, although the annual rent increase in Auckland was much lower at just $10 a week.
According to the latest rental figures based on bond data from Tenancy Services, the national median rent increased to $540 in the third quarter of this year from $500 a week in the third quarter of last year, giving annual growth of 8%.
Most of the bonds received by Tenancy Services would be for new tenancies, which makes their figures a leading indicator of rental movements because new tenancies set the market rate that rents for existing tenancies are adjusted to as they come up for review.
The latest figures show some big regional variations suggesting big differences in the availability of rental housing in different parts of the country.
The amount by which rents have increased over the year to September ranged form zero in Taupo, where the third quarter (Q3) 2022 median rent of $450 a week was unchanged from a year earlier, to $75 a week (+17.9%) in Masterton.
Ashburton, Timaru and Invercargill were in a three-way tie for having the cheapest median rents in the country at $400 a week, while Porirua had the most expensive median rent at $650 a week, surpassing Tauranga at $630 and Queenstown-Lakes at $620. See the first table below for the median rent in the main urban centres throughout the country.
A notable feature of the latest figures is the very weak rental growth in the country's largest city, Auckland.
The median rent in Auckland increased from $580 a week in Q3 2021 to $590 in Q3 2022, giving an annual increase of just $10 (+1.7%).
The second table below shows the annual change in median rent by Auckland Council ward areas, and this shows median rents declined in three wards; Waitemata & Gulf, Whau and Orakei between Q3 2021 and Q3, 2022, and were unchanged in another four wards; Albert-Eden-Roskill, Maungakiekie-Tamaki, Manurewa-Papakura and Franklin. The map below shows the ward boundaries.
The modest overall increase in Auckland's median rent compared to other parts of the country comes after a period in which there has been no migration-driven population growth while construction of new homes has proceeded at pace, and the relative rent stability suggests the supply and demand for rental housing in the region are largely back in balance for the time being.
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Auckland Council Wards
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91 Comments
It would be in the interest of renters to punish at the next election any political party advocating for a return to mass immigration.
How? The big parties will both do it, except one will gaslight you and pretend it never had a policy to do otherwise.
It's going to happen one way or the other.
Election 2023; "It's gonna happen anyway". It's a fair way to sum up the state of politics in NZ.
I mean to be fair this is just the 2005 election all over again from what I can see, so I'm expecting a chequebook bonanza from Labour and even more Newstalk ZB-pitched policy from National.
I think back to Hosking's usual rant on migration and his demand for more cooks, cleaners, delivery drivers, shelve-stockers, fruit-pickers, etc. to fuel NZ's prosperity.
Funny the guy criticises the current lot for bringing 70s-style unionism back when his ideal labour market has an 1800s-style wage-slave underclass.
Yes. We don't vote for the big parties or the looney left then.
Or ACT.
National Median Rent - $540 pw = $28.080, before tax.
National Median House Price - $951,040.
ROA = 2.95%
Sell up and stick the proceeds in the bank for a year at 5% = $47,552, before tax.
Lots of conclusions can be drawn from those figure - in any direction we like.
ROA was never factored by investors. Expected (guaranteed?) capital gain was. The current situation will mark a pause for them, but they'll come back when we return to 5%+ gains a year (on top of ~3% from the rent).
Correct, did the math back in 2014 and renting the house out vs 4.8% return on a TD and it was break even. All the return on the investment was capital gain, which in hindsight was pretty huge but with the money in a TD its stress free and no hassle with tenants.
You're right bw, residential investments makes no financial sense at all anymore, especially with interest rates at 6% and the end of tax deduction of said interest costs. The UK introduced the end of interest cost tax deductibility 3 years earlier than NZ and only this year have any landlords sold en masse. Expect a similar selling wave from NZ landlords, who are for now holding off, in 2024. It's only thing to know that tax deductibility is gone, it's an entirely different prospect to get, a year later on, a huge tax bill to pay!
The deductibly still exists on newer houses. You just can't deduct on ancient slumboxes anymore.
Unless it's being rented to the government/social housing situation.
Brock's slant and bias is on full display, what do you think. Ancient slumboxes, maybe he spent too long in the old country 🤡
If it's in Sth Auckland it's an ancient slumbox.
If it's in Ponsonby it's full of old world charm and classical styling.
An Ancient slumbox is the only rental brock could get
I would be surprised if Brock will dignify this fantasy based comment with a response.
When you make stuff up, you're the one that's a fool. Questions are then raised about your living conditions..
Talking of “ancient slum boxes”, I thought Crash-Crusader was bound to show up:
1) He’s about as dignified as a slum box.
2) It’s the type of emotive language that attracts him.
TTP
OK "Taking the Proverbial" in your infinite wisdom, what do you want for the NZ residential property market right now ?
No one wants a real crash, as this will take out many jobs ...which would lead into a recession etc etc
And we all know what happens when prices keep going up....ad infinitum .....it never ends well.
Thoughts from the provinces ol' boy ?
Retrained Potty, not too low for a slumdog like yourself(ves)
You guys read like premium bitter interest payers. You pay it, I receive it. Right now, its not a good position to be in. The RBNZ is making a big announcement on Wednesday...
Be kind to us depositors. If it wasn't for us, you might well be paying even higher rates!
Dont you know you're getting screwed Poppy. Banks have increased their margins which means you get less than what you would have got 5 years ago on the same mortgage rate 🤣
From an investment perspective, somehow you think you're full of wisdom paying ever increasing interest on an asset that's tanking in value???? Since you're not using/losing my money, I wish you well.
edit
You really are. I will call the vet for you
If this is the only way you can express frustration I guess you can only dream of being the brightest light in the street. Since its you that's being milked here perhaps its you that needs regular trips to the Vet? Just saying.
Moove on to some fresh pasture. This paddock is full of your bullshit
Back to your trollling ways... sacked already.
He is pondering his 'Future'
Well "Future" is gone !
He was ahead of his time.
"Paying ever increasing interest"
my mortgage is fixed for 5 years at a low low interest rate
Uh-huh, does your bank know this? 😆
To brighten your otherwise dull afternoon, your other alias's (Pa1nter and Nifty1) will give you thumbs up shortly. I will leave it there because Zachary (REA) might complain that your posts have not been removed by the editor, yet his Property Promotions were 😭
Retired Poppy a whole lot of people are starting to call you out, it's obvious you are Future - obsessing about TTP, Market Crash, Upvotes etc. Just chill mate & save yourself the trouble of logging into multiple accounts.
HW2, one of us has something to hide and it sure ain't me. Interest. co can easily investigate by way of IP address 😊
Grow up buddy. Future is another commentator altogether, much to your regret.
(Nifty1, Pa1nter & HW2) = three tools in one.
Well Retired-Property your Future is dubious... just as well theres a demand for staff, of any capacity
As I said above, "Future" is gone, for good
Yup he sure is. I just tried clicking on his name. His profile is no longer accessible.
There really is no Future....
Within 3 days he will be risen.
As 2023 perhaps?
Sorry for your loss Retired Poppy... if you need name suggestions for the next account please let us know. Maybe there could be a poll done?
HW2, more to the point, you will need to find another broken record to sing along to. You must surely you must be grieving 😭
As a proven fake you make stuff up. Filled with jealousy, you fantasize over the lives of other good living people.
Be happy and greatful for what you have in life 😊
Thank God for that. At the other end of the spectrum to the spruikers, but just as detestable.
New builds for rental dont make sense, land and build costs are too high
Isn't National set to reinstate interest tax deductibility? Sure there's alot of landlords holding off in hope for this.
Lol. Even if National does get in at this rate the landlords total investment will have bombed 50% in value and there will be way more tenants than rentals so he will be renting at a lower rate.
But nice to claim some tax back.
so at what price point effective yield does it make sense to be the buyer... 7% yield?
IT GUY .....try for a gross yield of 14.4% on one property and 12.5% on another...I've done it, but in another country.
I always remember years ago someone saying, you should have at least an 8% gross yield.
In the UK they replaced interest deductibility with a tax credit, something which Labour apologists always forget to mention. So around 70% of landlords were unaffected by the tax changes. And secondly, the interest deductibility only affected personal income tax payers - if you bought a property through a corporate vehicle the new tax rules didnt apply.
https://www.simplybusiness.co.uk/knowledge/articles/2022/03/impact-of-l…
Thanks for the link - the interesting result was that UK introduced the interest deductibility changes 3 years earlier than NZ. For taxpayers on the 40% tax rate, the 20% x interest paid tax credit resulted in a similar tax bill as NZ.
eg Rent $15k Interest paid $5k
40% x $15k = $6k tax less 20%x$5k credit = net tax $5k (tax bill before interest deductibility brought in was 40% x ($15-$5k) = $4k)
For NZ say 33%x$15k =$5k tax bill - (tax bill before interest deductibility brought in was 33% x ($15-$5k) = $3,300)
The interesting part of the experiment in UK was that rents climbed gradually for first 3 years but jumped dramatically in last 2 years so since NZ 3 years behind UK in implementing phase out of interest deductibility NZ can expect a jump in rents as landlords start passing on their costs.
Average rent increase per year over the 5 year period in the UK data set provided from 2016 - 2021 was 7.7%
net rent after 33% tax = 18813 makes ROA 1.98%
What you're missing is the National Median for rental properties. Properties at the lower end.... A lot of people don't know that (a trumpism)
Is it a genuine mistake or a genuine attempt to screw the ROA
Your calculation is based on an assumption that rentals are purchased at median prices.
Adjusted for inflation, rents are going backwards big time in our largest city.
Great news for tenants, its encouraging to see. It means there's much more choice and some Landlords are struggling to pass on their financial woes...
There will be many "Reluctant Landlords" wishing they had sold last November. It will likely be many years before we see those prices again!
Ask yourself when you expect to see 2% mortgage rates again..... you have your answer.
The next time central authorities want to stimulate the economy?
three letters D T I
In Auckland yes, but overall no.
The national median rent increased to $540 in the third quarter of this year from $500 a week in the third quarter of last year, giving annual growth of 8%.
Some very good landlords out there, renters in my family are very happy at the moment. One landlord maintains a vege garden, supplies the firewood, does the lawns and even provides some furniture (new bed recently). At the moment he is covering the lack of rent while they look for a replacement to tenant that's just left. Not bad for $200 each a week close to Ham hospital and work.
Appreciates good tenants.
Regardless of what you're doing for income, the better business strategy is to be priced fairly and offer above average service.
Easier to keep a customer than find a new one, etc.
I need to list my painting job this week, I hope I find a pa1nter with that attitude.
R-P ...we are not going to see those prices again, as the only way would be for interest rates to fall back to 2% ......and that ain't gonna happen.
So if you have a rental sh*tbox out there in a bad area - sell ! take the money and pay down debt !
L shaped recovery Bought to you by the Letters D T and I
Well put... 👍
That was because of the Government’s policy to strip investors of their ability to deduct mortgage interest from rental incomes for tax purposes.
National have promised to reverse the change, but if Labour remained in power, King said a federation survey showed the policy could result in a fifth of investors being forced to sell-up.
Even a tenth would be dramatic to watch.
If labour plays this right they can argue its been their strategy all along. Reduce tax incentives for landlords, encourage investment in producive business and when landlords are forced to sell labour can buy all their properties for a song and hand them to the emergency housing folk
Sounds a better vote for most than national.
Force to sell up? I thought they were just going to put the rent up... Or have they finally realised that property prices are somewhat related to yield and interest rates?
WhoCouldHaveNooed
New Zealand Property Investors Federation (NZPIF) Grand Pooh-Bah Andrew King retires.
Spooky. Perhaps the bubble really is toast.
https://www.stuff.co.nz/business/130470394/king-of-property-hangs-up-hi…
Product of corrupt system weighted in favor of rich and powerful.
Product of corrupt system weighted in favor of rich and powerful.
Not sure I fully agree. The start of the property bubble complex started around the time of bank regulation in the 90s. You didn't have to be a 1%er to participate. That's why it became the be all and end all.
He's already taken the cream and the cow, now he can sit back while others serve him milk
But King said, in order to increase the supply of houses, “you don’t actually have to build a house".
in other words divide the rooms add bunks and add more tenants, which was happening in queenstown during the last peak
The aspiring landed gentry really have become rather 19th century. I bet they congratulate themselves on being nice to the servant class too, asking them how they're doing etc. "They love me, I'm good to them."
I wonder how much the Auckland figures are being dragged down by the slow inner city. Looking at the chart… they are the 2 biggest losers. The rest of Auckland is neutral to positive. People must be getting close to max payable rent. Some of those rents per week are crazy!
I wonder how much the Auckland figures are being dragged down by the slow inner city. Looking at the chart… they are the 2 biggest losers. The rest of Auckland is neutral to positive. People must be getting close to max payable rent. Some of those rents per week are crazy!
What they don't understand well is that it sucks consumer spending out of the other parts of the non-shelter economy. It is potentially a tipping point for the whole shebang to cave in on itself. Removing marginal spend from the non-shelter parts of the economy means that it puts businesses on the ropes.
Not many people understand this.
Thats part of the problem setting the OCR, you need a goldilocks setting, IMHO given the amount of debt out there and its unbalanced distribution towards FTBers and places like Auckland, its a recipe for Disaster.
It will IMHO be much harder for Auckland FTBers then Christchurch FTBers.
Thats part of the problem setting the OCR, you need a goldilocks setting, IMHO given the amount of debt out there and its unbalanced distribution towards FTBers and places like Auckland, its a recipe for Disaster.
For sure. But like I alluded to, it's far more interconnected than most people think with the broader economy. People tend to think in siloes and don't really join the dots. What's more, they come out with comments like "only xx% of the popn rents and many have zero shelter costs." That misses the whole point about marginal spend into the economy. They don't understand how close we are to a single SKU not being moved to a shopping basket means that a business falls over. When a butterfly flaps its wings, you don't really know if a hurricane is going to be unleashed.
I suspect Labour is quite happy to use visa/boarder restrictions to do some work to benefit of renters' and wage earners'.
Porirua had the most expensive median rent at $650 a week, surpassing Tauranga at $630 and Queenstown-Lakes at $620
Interesting. Probably all the taxpayer subsidized rent top-ups.
Could also be the high price of houses and corresponding high rental prices in the suburb of Aotea? There's only 6 Aotea rentals on Trade Me currently but the cheapest is $820 per week.
How many are rented to social housing providers or WINZ tenants, at above market rates?
Ah the investment paradise that is Cannon's creek.
The agents in the suburb sporting their fancy coats remind me of Jordan Belfort and his sales pitch on penny stocks!
The PPP (property ponzi party) is now officially finished (hangover headaches to follow) and the "gravy train" has pulled up and stopped at the Wellington railway station, just a stone's throw from Parliament ....no more room for rent increases, despite hearing for years from all those "astute" investors out there, saying at any increased costs, we'll just raise rents....that had to come to an end
Well, lets get back to a total "free" market and finally get rid of this accommodation supplement that allows "cheap charlie" landlords to rent out the damp, mouldy dumps, at prices the tenants couldn't afford anyway, in areas where they themselves, wouldn't even go to visit during the day.....seen them in person.
Get rents back to their "true" market value and not "topped up" by the taxpayer ....when an economy was run for so long, making it more financially advantageous to have a rental property, over a salaried job, it was never going to end well.
And by the way, to anyone who says that getting rid of the accommodation supplement, is a form of "rent control", when you go and hire a car, do you expect the government to top you up, because you can't afford to hire that top of the line SUV, on that jaunt around Queenstown ?
Kiwis (mainly Aucklanders and Wellingtonians) please stay home and delay coming over for a year or two. Brisbane is seriously running out of space.
https://www.macrobusiness.com.au/2022/11/brisbanes-rental-market-an-unm…
1 in 5 Brisbane houses were empty on census night.
Malinvestment. Too many foreign owners. Too many speculative and parasitic investment decisions.
https://www.realestate.com.au/news/one-in-five-empty-homes-on-census-ni…
August 2021 was the last census, roughly 1.8% more people and Feb 2022 flood had dramatically altered the accommodation scenery for Brisbane!
A 3br in our street, rental went from $550 to $750 and they had 26 applicants!
I note that Williams Corp is currently bringing in plane loads of people from Singapore. I'm guessing all investors.
8%, good. Just prop up that domestic inflation rate.
RBNZ still have a lot of work to do.
House prices down 20% yoy - rents up 8% yoy.
Give 16 year old the vote and rent controls, here we come.
An end to intergenerational ripoff where accommodation is concerned.
Entitled older folk with fight tooth and nail to prevent 16 year olds being represented in democracy. The absolute gall of imagining that taxpayers shouldn't subsidise rental yields and prices while NIMBYs prevent building!
You're a kindred-spirit, Rick!
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