The national median rent for newly tenanted residential properties hit $600 a week for the first time in the first quarter (Q1) of this year.
That was up $20 (3.4%) a week compared to the fourth quarter (Q4) last year, and up by $35 a week (6.2%) compared to Q1 last year.
Looking at the different types of housing, two bedroom units/apartments had the biggest annual increase of $40 a week (7.1%), rising from $560 in Q1 last year to $600 in Q1 this year.
The median rent for three bedroom houses increased by $30 a week (4.8%) over the same period, from $620 in Q1 last year to $650 in Q1 this year.
One bedroom units/apartments had the smallest annual increase at $20 a week (4.7%), rising from $430 to $450 a week over the same period.
Around the main centres, median rents in Auckland were up $50 a week (8.3%), rising from $600 a week in Q1 last year to Q1 this year to $650 in Q1 this year.
In Hamilton the median increased by $30 a week, rising from $520 to $550, and in Tauranga the median rent was up $45 a week from $650 to $695.
Of the main centres, rent increases were weakest in Wellington City with median rent there dipping from $650 in Q1 last year to $590 in Q2 and Q3, then rising to $600 in Q4 and back up to $650 in Q1 this year, putting it back where it was 12 months earlier.
In Christchurch the median rent increased from $500 in Q1 last year to $550 in Q1 this year, up 10% over the 12 months. In Dunedin median rents also rose by $50 for the year, from $550 to $600.
Interest.co.nz's rent data is sourced form bonds received by Tenancy Services each month.
That makes it a leading indicator of rental movements because it reflects the market rents currently being charged for new tenancies, and that data is also used by landlords to assess rent adjustments when rents on existing tenancies are reviewed.
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62 Comments
Insane.
The ongoing unsustainable inbound immigration rate is driving NZ's housing crisis and successive governments are failing to implement a sustainable population strategy.
Not to mention that ultra low interest rates led to stupidly high house prices that cannot generate any kind of reasonable yield at current interest rates. Obviously the first thing a property investor will do is raise the price, but their ability to do that will be very limited.
Yes, low interest rates pushed asset prices sky high along with the tax system that favours property investment.
.
Restrictive zoning is a far bigger issue than interest rates and immigration.
Every morning I walk my dog past the house my wife and I used to rent in 2018/2019 before we bought our own place.
If I recall, we paid about $500 per week to rent. 3 bed, 2 bath townhouse in a fairly convenient part of town. Just the two of us and one of the rooms used as a home office, the other kept spare for guests. It was honestly a great property for us at the time, and although $500 wasn't cheap then for rent it was reasonable enough considering the modern nature of the property and nice area.
That same house now clearly has multiple families (all of one origin) living in it. Same with several of the other houses in the row.
I don't know exactly what it would be renting for, but similar properties in the area are going for the best part of $700 p/w.
How can a young couple, or an existing Kiwi family, compete (and then also save for their own home) when we are importing people who are willing to cram, 6, 8, 10 to a modestly sized house in order to seek a better life, and also accept lower wages in the process?
Working for families is what allows most NZ middle income families to keep their head just above the water.
I don't think you get WFF if you are middle class. You either need a million kids or no income to get anything these days.
Sorry to break the news Jimbo. But if you have 2 kids you get WFF for a household income of up to $102,000. With 3 kids it is up to $120,000. The median household income in 2023 was $99,000.
Middle class families keep their head above water though WFF.
You get $26 a week with 2 kids at $99k if I am reading this table correctly: https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-gui… So that is a whopping 1.3% of income comes from WFF, I doubt that is what keeps them above water.
2 people earning minimum wage x40 hours a week get $96k. Next year they may not be eligible!
It needs to be renamed to "Not working for very large families"
$26. I think you might be underestimating how excited people get about an extra $20/w (remember the election?).
In all seriousness though, that is likely something like two week's rent (or possibly mortgage payments) each year for someone in those circumstances.
If min wage is $96k, surely the average family where both adults work get at least 10k more, in which case you get nothing. It does not help the average family at all, it only helps families with 1x income / 2x very low income / no income / lots of kids / company to hide it all
I like to think I know a lot off people from a wide variety of backgrounds. In my experience a household with 2 parents working fulltime is much less common than I would expect. A household without children and 2 adults working fulltime is very common though.
Pretty sure median household income in NZ was 99k for 2023. I wouldn't be surprised if households with children were more likely in the bottom half and those without kids more likely to be in the top half of household incomes.
The median must be skewed down by pensioners etc.
People believe that working families get a lot of help from WFF, which was probably true when it was introduced. But these days, if you both work full time you will get very little if anything. Sure it helps many families, but not so much the 2x working families.
Middle class doesn't mean middle anymore.
Christchurch will never be able to compete with Auckland as the engine room of the economy if the best they can do is fit in 10 to a modestly sized house!
How can a young couple, or an existing Kiwi family, compete (and then also save for their own home) when we are importing people who are willing to cram, 6, 8, 10 to a modestly sized house in order to seek a better life, and also accept lower wages in the process?
Great question, fortunately New Zealand Governements have been running a longitudinal study for decades to determine answers. While the study is ongoing, 'early results' are pointing to it being nigh on impossible. One indicator being the number of NZ citizens prepared to leave behind family connections and start new lives abroad.
haw haw ....working out just as we planned, as I sit here reclining in my Louis the XIV original boudoir chair, in my 7 Mile Beach villa, on the sunny tax free haven of the Cayman Islands
Your little country at the bottom of the world, has past the test on turning so many of you into "Ma & Pa" residential property landlords, that we have now got everyone by the short and curlies...... haw haw
You "savvy" investors have taken the bait - hook, line and sinker and we are now filling your abodes with lots of people, who are desperate to get of their own overcrowded, filthy and corrupt countries....only to push rents up so high, so the only way to afford it, is to cram as many of you into the one house ! ....10 in a $1,000 rental is only $100 kiwi pesos a week - bliss for us multinational bankers !
We'll have Auckland looking like Manila, as quick as the ever wonderful NZ Immigration keep letting these lovely folk in ....:)
Happy daze to you all .....while our cash flow just keeps on rolling in ....haw haw
Anyway, why am I dilly dallying around here - it's G & T time, thanks Marco I'll have mine with a twist of lime.....what a beautiful sunset ...... Now back to work, you have KPI's to keep on top of ....haw haw
I wonder how many people are still left to arrive after Labour's furious rubberstamping of visas last year? Is there any information on the number of visa applications, vs how many have arrived? For all we know, there may be another 250,000 people on the way.
Not much is going to change under the Blue team KW -
Work visa applications trending down, and so are accepted visas.
Residency trending down significantly in all applications other than primary/secondary family members (spouse/parent/child of).
All in all migration is tapering off, we're granting ~4,000 residencies p/m which is around long term average.
Have a dig around, you might be surprised what the headline figures will be saying in ~6mo
Long term net immigration is reported to be negative 1,000 per week. Our population is likely already going backwards but won't show in the statistics for a while yet.
Not to mention the big influx of immigrants was starting from a base of 0. Most are on visitor, student and temporary work visas so now we are over the initial gate opening, many will be leaving, harder to replace and the headline figure may naturally drop. Meanwhile there is an exodus of departures happening in the data now - this may recover but I don't know.
They should make having a place to stay a prerequisite. It's harder to import a cat into NZ than a Somalian refugee. 😶
Inflation - due to the out of control money printing ?
There is only so much juice you can squeeze out of a lemon
True, but we're still working on how many people may be squeezed into a 3 b/r house.
I think we were hitting 30 in Auckland not that long ago in the news. Given they were paying for the privilege to come here, I don't think we've hit the ceiling (pun intended) yet!
There's still plenty of juice to be squeezed. All of the landlords I know in Auckland are getting multiple enquiries on vacancies in the first day just by word of mouth.
Those who are already de-juiced will be going on the social housing waitlist or back with mum and dad.
The economy must be doing better than we all thought...
It’s no wonder our young are off to Australia. How do you save a deposit for your first home when you earn so little in NZ and have to pay rent at these levels. Us boomers have forced so many of our children (and grandchildren) off shore.
Yes this is the situation. Cheerleading house price increases is also cheerleading young Kiwis to leave. They have no reason to have loyalty/patrionism anymore and NZ doesn't deserve to keep them.
The Situation in Australia, is not much better from the housing perspective
The situation has gotten worse in both countries, it's still all easier in Australia though factoring incomes and other living costs, especially outside of Sydney.
Average rent in Melbourne is $589 a week, lower than all of NZ's average, let alone Auckland. Also vacancy rates are rising in Melbourne so pressure is coming off rent rises.
Melbourne has also seen a 21% increase in the number of first home buyers in the last year, while house prices have only gained 1.1%.
So higher wages, lower rents, affordable houses, better lifestyle. Why would you stay in NZ?
That's AUD. The average rent in Melbourne is $643 NZD. Which makes it more or less the same as Auckland. The central eastern suburbs of Melbourne are averaging $820 NZD. Sydney's median is $820 NZD.
The rent inflation is even worse across the ditch. Believe it or not, this is one of the few things we beat the Aussies in atm.
Except that you earn Aussie dollars to pay Aussie rents. So you have a higher salary and pay less of it in rent. The exchange rate doesnt factor into disposable income.
You may be in for one hell of a drive in Melbourne though, they have got there through endless sprawl and a favourable geography.
Thankfully much of it is serviced by decent public transport.
$20 a week rent rise. Looks like Nationals tax break has been eaten up by inflation.
It's ok soon landlords will have their tax breaks reinstated and they will slow down rent increases...
It cant come soon enough for those caught in this 'cost of living crisis' that Luxon is very concerned about... Oh, and lets not forget landlord dignity. It is really a two for one deal.
And this is just the beginning.
My Torbay neighbour is renting his 3 beds house for $800 per week, it took him 2-3 weeks to find a family.
Next year it might reach to 1K per week (like my mortgage), depends on immigration and other factors.
By the end of the day, families need shelters, if you don't buy - rent!
Assuming the 8.3% inflation continues in Auckland (which it may well do with the AC rates) the rent will go up to $865 next year. Still a big jump.
That isn't/shouldn't be how it's calculated, unless the rates are going up by $65pw. I am not a fan of any landlord using such a generalised calculation, and yes I know I'm giving many landlords too much credit in thinking they do their sums at all.
Then again, factor in insurance rises as well and it could very well not be far off.
For years we have hid inflation in assets. Now with higher interest rates and very little room for capital gains, people are wanting a better return on those assets, and that is turning into consumer price inflation. This could be a very dangerous feedback loop!
For years we have hid inflation in assets.
And it could be argued that this caused the dangerous feedback loop of 'low inflation' --> low interest rates.
I'm no expert when it comes to understanding inflation calculations but hopefully there is some attention being given to a more appropriate weighting of accommodation costs.
More evidence of the dishonesty and deception of the coalition government. Give the landlords tax breaks and they put the rents up. Why are landlords so bitter and angry?
Landlords dont pay tax weekly, so they wont see any financial relief from their cash drain until they do their tax return next year.
And your point is? Landlord suck.
That's a "Balanced" post, NOT, LOL
There might be a small tax reduction for landlords in the coming months. It is a tax reduction, not a tax break, because no other service provider or business in the country is expected to pay tax before interest deductions. In the meantime, landlords are having to pay higher interest rates, higher maintenance costs, higher rates, higher insurance, and higher capital losses.
That some people think there is something sinister going on when these costs filter through to tenants either shows an ignorance in rudimentary economics, or a sense of entitlement.
1689 Baptist hahahaha not credible
how so?
Don't waste your time.
Not all landlords are bitter and/or angry, only those who thought it was a no-lose enterprise.
The best thing we could do for the rental market is stop Parmac funding blood pressure medication
Another well "Balanced" post... LOL
and that data is also used by landlords to assess rent adjustments when rents on existing tenancies are reviewed.
Yes, part of the problem - not sure why this government data is made available to the industry. At worst It's an element of market collusion - at best, it's immensely 'helpful' to landlord's wanting to ratchet up the rent to as far as the market will tolerate.
And I suspect, it is also why we see the trend of rent asking prices being a higher proportion of the property valuations (and thus yields are better) in the lower socioeconomic suburbs.
It's a double-edged sword - tenants can also use the stats to support Tenancy Tribunal actions claiming increases above market levels.
Their firewalls were also subject to a very public Zero Day exploit a month or so back. Some NZ customers were targeted and breached
Rents are higher in low socioeconomic areas because the risk of renting to those tenants is higher. Landlords have to budget for higher repairs and maintenance, non payment of rent, Tenancy Tribunal applications, eviction orders, meth clean ups, fixing damaged properties, cleaning bills, dump fees, debt collectors .....
Also, the lower opportunity of capital gains needs to be countered with better yields.
It's always seemed like a self fulfilling feedback loop to me. I suspect the number of landlords who value their house at a quartile lower than it's actual value is significantly lower than those who value it higher. New rent is set, pushes up quartile values, next landlord rinses and repeats and rent continues its upward climb.
No sh1t
Yields are certainly improving and it’s not like rent will come down when interest rates inevitably do. I suspect there is some pent up investor demand sitting out there.
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