Residential rents remained flat for the third straight quarter in the September quarter (Q3), although there were more properties being tenanted.
According to Tenancy Services' Bond Centre data, the national median rent was $600 a week in Q3, which means it has remained unchanged at $600 for all of this year.
There has also been very little movement in rents for different property types.
The median rent for three bedroom houses, the main type of tenanted property, has remained on $650 a week for the first three quarters of this year. The median rent for one bedroom units/apartments has been at $450 a week since Q2 last year, apart from Q2 this year when it briefly increased to $460.
Similarly, the median rent for two bedroom units/apartments was at $600 a week for the first two quarters of this year before dipping down to $590 in Q3.
However while rents appear to stable, there has been a significant increase in rental activity, with Tenancy Services receiving 37,557 bonds in Q3 this year, up 8.8% compared to Q3 last year.
Most of the bonds received would have been for new tenancies, which makes bond data a leading indicator of rental market movements. That's because it's based on actual rents agreed between landlords and tenants, and the data is also used by landlords to help set rents for existing tenants at annual rent reviews.
The graphs below show the quarterly median rents for all of Aotearoa and the main urban districts around the country since the beginning of 2021.
They show that rents are steady in Auckland, Tauranga and Wellington City, while Hamilton and Dunedin are going against the national trend and rising, with Christchurch and Lower Hutt showing slight declines.
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26 Comments
With tenants finances stretched and with rentals abundant, Landlords have struck it tough in their efforts to pass on the increased holding costs. After adjusting for inflation, rents are actually falling. A lot of negative gearing in play whilst the asset has been declining in value. For the capital gain hungry and unseasoned, was this really the outcome that was anticipated?
For this exact point in time the answer is yes. Mortgage rates are falling so there is no pressure on landlords to put up the rent, they are pocketing hundreds of dollars a week without doing a thing. We are on the edge of another property value upswing so anyone playing the long game will just sit back and watch.
For the capital gain hungry and unseasoned, was this really the outcome that was anticipated?
How can the answer be yes? Likely the capital gain hungry and unseasoned were buying when interest rates were low and may have been buying with equity so surely they bought with the anticipation of capital gains and/or rising rents, why would they buy otherwise? As an example, this couple who bought two apartments off the plans because they thought they would make a profit of between $30-$50k and would never have to settle because the properties would be onsold before settlement. They tried and failed to get out of the contract.
Despite house prices falling significantly over the past three years, rents have continued their upward trend. 📈
Most landlords have done well enough. With mortgage interest rates now in decline, it would seem reasonable for landlords to ease rents back.
TTP
LOL like landlords are going to drop the rent. They can use the famous two words used on here all the time "In real terms your rent has actually decreased"
Despite house prices falling significantly over the past three years
Credit where credits due, it's good to see you finally acknowledge this.
It's a little slimy that you would have spoke in your native tongue (ad-hom) had in times past someone dare predict this would even happen.
What a plonker you are, Retired-Poppy.
Heaps and heaps of my posts here deal with the ups 'n' downs of property cycles and price/activity dynamics across the long-term.
Go get a life.
TTP
I rest my case....😂🤣
You panties had a knot.. TTP.
@ TTP - Why ever would rents ease back? When the cost to operate continues to climb higher. Interest rates are but just one associated operational cost to factor in, all be it a large factor.
You have not considered year on year rates rises, horizons rises, water rates rises, property management fee rises, insurance rises. There's no heavy discounting of rents for a tenant when a landlords costs are still rising or remain high. Interest rates may be coming down slightly, but all other costs are continuing to rise by significant increases every year. A tenants rent is no exception to this
With mortgage rates coming down and interest now 80% tax deductible (and going to 100% in April), its no surprise tenants are finally seeing some benefits. Primarily from the increased availability of much cheaper, existing older housing instead of the more expensive brand new townhouses. This also gives tenants the ability to move out of their expensive brand new townhouses with limited or no parking and into older units that have full sized kitchens, garages, and backyards - reducing their rental cost while improving their living standards.
In fact, Zwifter, there are precedents for landlords reducing rents.
Plenty of landlords did so as recently as 3-4 years ago - during the worst of the Covid pandemic.
I suggest tenants lean on them to do so again. Certainly, I'll be doing that. There's no harm in trying ......
TTP
Not seeing rents falling here in Christchurch, quite the opposite!
All our existing tenants have paid increased rents this year and will be increased again at next review.
It is currently cheaper to rent at the moment than to own when costs have increased.
Robertson’s ludicrous policy that took away landlords being able to claim the interest has not helped.
Proportion of older cheaper rentals increasing with the reintroduction of interest deductability. Looking at properties on a case by case basis, most tenants have had rents increase 5-10%.
A thought for supply: if we lost 80,000 Kiwis last year who historically have 2.7 people per household and our immigration demographics typically have a higher proportion / household (say > 4 / household) then demand for housing drops faster than just a decline in immigration. I mean just that 80k is about 10000 less houses needed let alone the more medium term reconfiguration?
Huh? Net migration is positive. Demand for housing is continuing to increase.
I guess some on here think that once everyone in the country leaves for Australia they should be able to buy a house for next to nothing.
I guess some on here .........
Most of your comments involve a disproportional amount of guesswork 😂🤣
I guess you have had to drop your other accounts, you usually have 3 upticks by now.
No, that's just more guesswork :) I've got 10 accounts. I'll drop all but this one on the last day of Feb 25!
This aside, why are you so consumed with others getting upvotes?
Probably mixed up between this and TikTok!
Zwifter - did you get your crystal ball from Temu?
From customs AirPAX, we're at (gross estimate) +60,000 for the year so far - mostly from October.
How many FHBs left the rental market (having bought)?
How many new builds were completed?
How many who left were tenants?
How many who left made a rental available?
Edit: are there more or less tourists and seasonal workers present than at the start of the year?
Minimal wage increases= minimal uplift in asking rents
Inflation is dead!
Just because the median rent is stuck at $600 doesn't mean rents aren't increasing (or decreasing). This is a weakness with using median. $600 is a big round number that would appear a large amount in the data set, so rents could be climbing but the median could remain at $600 a long time because of it's frequency.
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