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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14 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.
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.
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?
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