Residential rents remained mostly flat last year with the national median rent in November remaining at $600 a week for the tenth consecutive month.
The latest rent figures from Tenancy Services suggest the national median rent peaked at $608 a week in January last year before dropping back to $600 in February, where it has remained ever since (see graph below).
November's median rent was calculated from 12,039 bonds received for properties tenanted that month, which was down by 7.8% compared to November 2023.
Around the main centres similar patterns have emerged, with rents largely flat after easing very slightly from record highs.
In the Auckland region the median rent remained at $650 a week for the five months from July to November last year after peaking at $670 in May.
In Waikato the median rent has remained between its record high of $570 a week and $560 for the five months to November, while the median rent in the Bay of Plenty dropped back from its record high of $650, to $630 in November.
The Wellington Region's median rents bounced around between its record high of $640 a week set in February last year and touched $600 a week a couple of times before settling at $630 in November.
In Canterbury the median rent bounced back up to its record high of $550 a week in November, which was first achieved in December 2023, so very little movement there.
71 Comments
Toye ....was a property manager 20 years ago in central Auckland for 2 years ......and NEVER had to put up a "for rent" sign.
While the biggest problems I had, were landlords not wanting to pass on their precious cash, for urgent repairs etc to their properties .....deeming some of them actually "unsafe" and/or unhealthy.
I'm sure there are some nice landlords out there that aren't doing all they can to bend their tenants over.
Unfortunately I did not encounter any in the years I was renting before buying my first home, I might have just been unlucky or maybe it was because I rented in Christchurch. However, I suspect it's because stereotypes aren't born in a vacuum.
It’s really interesting to see rents stabilising or even dropping in some areas, especially with the oversupply. It feels like we’re seeing a shift in the market that’s been a long time coming. I came across this page recently: https://www.opespartners.co.nz/rental-market. There's a lot of data and it gave me a bit more context about what’s going on and where things might head next.
Rents have definitely been increasing from where I see it.
Landlords definitely need to be increasing rents to semi cover increased rates and insurance costs, and the non deductibility of interest which was a stupid thing for Labour to have done.
Tenants know that increases are coming and we have not had a single tenancy not renew due to the increases, but then again we are providing attractive accommodation at a fair rate.
In our case we often do not increase the bond when the rent is increased so the average rent figure is not totally accurate.
That is totally incorrect.
We do not divulge any info about what we are doing unless people actually ask, and yes that is quite often.
Personally do not have any friends that are renting, and if they were I wouldve shown them how to own their own home.
I am a caring and responsible person, that tries to make things happen for people and not whinge about things!
I sincerely hope your nose is not growing too much when you say “ caring and responsible person, that tries to make things happen for people and not whinge about things!”
You have been banned here as TheMan then banned again as TheMan2 only to pop up again spouting the same boomer crap always have.
But yes you are doing gods work of course so you do you boo.
Toye, i am sure there are heaps of landlords that do not gather more bond when they raise the rent, so the average rent will not be accurate.
Tenants seem to be staying longer in tenancies and a lot of the new bonds will be for the 2 bedroom townhouses which generally is not a true indication of thr existing market.
Anyway doesnt affect landlords that have their finger on the pulse.
Why are you so concerned about trying to disprove the statistics?
You constantly go on about how you are an above average investor whose properties' prices always go up, always increases rents above average, has the happiest tenants and overall just a real star of the property industry. Surely you can understand you're exceptionality (if true) is exactly that: an exception.
Merely just pointing out that statistics are often wrong, and in the case of real estate statistics and rental stats, you can treat them with a grain of salt!
We all know that figures can be misconstrued and we get given different figures from different sources.
If the figures being quoted are true then I would say there would be a ton of landlords getting out of providing homes for tenants shortly!
It’s not a problem if you’re a landlord with small or no mortgage. But if you’ve been speculating on capital gains instead of rental yield, it could be an issue if you’re unable to increase rent.
As it looks like prices are coming down, I’d say stick to rental yield otherwise, your "business" is just making money for the council, insurance companies, and banks etc.
Fair Question The Man3 ..... if you take a property of yours and it's CV, then it's gross annual rent (before ANY expenses) what is your gross return percentage.
Here's one of mine ....cost of purchase and renovations to bring it up to a good standard = $150,000
Annual rent $1,800 per month = $ 21,600
$21,600 x 100 = 2,160,000 / 150,000 = 14.4% gross return
Please can you show me a property in Christchurch, where you can get at least a 10 % gross return ?
OTHERWISE you are only relying on capital gains to make your money .....
It's was for a property I bought in the US in 2012 .....I wouldn't touch any property now, that I couldn't get at least a 10% return
And Kraken is correct, the ones that are doing fine, have held their property for at least 10 years
All a new rental property investor is doing now is passing the rents back to the bank, insurance co's, property managers, councils with rates etc, repairs, maintenance etc etc .... ie "vested" interests, in the rapidly deflating NZ property ponzi party !
We’ve got young people in their twenties and thirties buying properties at their limits, only making it work by renting out all the rooms to flatmates. Right now, this model can work if you choose to delay starting a family or decide not to have kids at all. But it’s a sign of a very unhealthy economy and part of why birth rates are dropping.
The unintended outcome is a kind of eugenics program, where asset speculation driven by ultra-low rates and easy credit has forced us into parasite-like behaviour. I don’t entirely blame those speculating, the low-rate environment created by our central banks and monetary system has allowed it.
You need that type of Gross for US property (it sounds like a Texas price) as there is less capital appreciation.
It is a win-win situation: the landlord gets a better yield and a fair ROI, and the tenant gets a more affordable rental.
And that is how it needs to be in NZ, although for that to happen now (which it will) means speculative gains first have to be lost, and then stability of prices will occur and rents will match.
True developers can still make capital gains but will have to do it by adding value alone, ie without the past presumptive speculative growth caused by limited supply.
OUCH !! the man3 .....no principal payments ??? ...the banks must love you :)
Also my gross return scenario would be based on a property for sale right now in Christchurch and it's expected sale price ...using the expected rents.
As I said I wouldn't accept anything with a gross rental return (buying today remember) of less than 10%
And as you know Christchurch so well, I'm sure you will delight in giving those figures, to help your local market along :)
I think if you're buying now in Christchurch and don't bring any special skills or innovation to the table you're probably getting much closer to 5% gross. Absolutely pathetic net returns given the rates and insurance down here.
If those capital gains don't show up it'll be very embarrassing.
"We would average around 10% overall now I would say approx. on purchase price"
Based on that calculation methodology, a relative was earning a gross yield of 23.6% at the time that they chose to sell their residential real estate.
Why did they choose to sell? They knew their opportunity cost. Some people don’t know the concept of opportunity cost is or what is their opportunity cost.
Toye ....anyone that thinks that the OCR is going back to 2.5% must have rocks in their head .... it would be so inflationary, the kiwi peso would sink to 0.25 cents in the USD !
Then watch the price of gas go up !! .....and everything else... some things are just way beyond your average "astute" NZ "property ponzi party" participant !
Banks are just pricing in the 25 - 50bps cut we'll see in February.
From another article on interest today.
Locally, markets seem certain that the RBNZ will cut its OCR by -50 bps on Thursday, February 19.
It may be the last of it and pigs may fly one day.
The current forecast is another 25bps cut in April.
Surely $600 would appear in the dataset lots, maybe more than any other number.
Meaning rents could still be increasing but the median unchanged, the median simply started at the 'first' $600 10 months ago and is now some way further along the number of $600's in the dataset.
Lets have some critical thinking here team!
Would need a bit of deeper analysis to see what is happening here.
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