Median rents have increased sharply in Auckland and Wellington over the last year but haven't changed at all in Christchurch, according to the latest figures from Building & Housing.
They show that the median rent for three bedroom houses in Auckland was $580 week in June, up by $30 a week compared to June last year, while the median rent for two bedroom flats in Auckland was $420 in June, up $25 a week over the same period.
The median rent for both three bedroom houses and two bedroom flats in Auckland has increased by $60 a week since June 2012 (see table below).
In Wellington the median rent for three bedroom houses increased by $20 a week over the last year, from $470 in June last year to $490 in June this year, while the median rent for two bedroom flats in the capital increased by $25 a week over the same period, from $340 a week in June last year to $365 last month.
However in Christchurch the median rents for both three bedroom houses and two bedroom flats were the same in June as they were in June last year, with houses stuck on $450 a week and flats on $340.
That means the median rent on a three bedroom house in Auckland is now $90 a week more than it is in Wellington and $140 a week more than it is in Christchurch.
Building & Housing collates the rent data from the tenancy bonds it receives each month, so the rent figures mainly relate to newly tenanted properties.
Throughout the country Building & Housing received 32,303 bonds in the three months to June, which was up 4.6% compared to the same period last year.
See the table below for the median rents in Auckland, Wellington and Christchurch since June 2012.
Median Rents June 2012 - June 2015 |
||||
| June 2012 | June 2013 | June 2014 | June 2015 | |
| Auckland 3 brm House | $520 | $540 | $550 | $580 |
| Auckland 2 brm Flat | $360 | $375 | $395 | $420 |
| Wellington 3 brm House | $465 | $455 | $470 | $490 |
| Wellington 2 brm Flat | $320 | $330 | $340 | $365 |
| Christchurch 3 brm House | $367 | $415 | $450 | $450 |
| Christchurch 2 brm Flat | $260 | $300 | $340 | $340 |
| Source: Building & Housing - MBIE | ||||
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36 Comments
This is only the beginning.
$1000 a week will be the norm for the average 3 bedroom house and garden within the next 5 years
Only shoe box apartments will be cheaper.
You were warned by Olly Newland that rents were "sure to rise" so don't say you weren't told.
link:
http://www.interest.co.nz/property/65570/olly-newland-recounts-ways-avo…
Nah mate, you're dreaming. Watch the economy come off the boil, migrants leave looking for work, families move out of Auckland and young professionals bounce over to Aussie when their economy pick up again.
But hey, you keep thinking about making more money - it's what makes you happy.
Might be if unemployment remains low - and wages or accommodation supplements rise accordingly.
But who thinks unemployment will remain low?
The other scenario: unemployment rises sharply, government tax receipts plummet and the accommodation supplement programme is dumped altogether as a 'one benefit covers all expenses' is implemented as a means to deal with the cost of administering the welfare regime.
Why New Zealanders don't see austerity on our horizon baffles me.
because they are refusing to look.
Thing is the likes of the bigdaddy speculators with considerable housing debt to the bank debt will, when the prices drop is such a scenario be wiped out leaving ppl like me ie the tax payer to bail out the banks. It is a pity we dont have debtor prisons for the the likes of these ppl. (though I suspect they are on the cards actually) though with a job in carrot pulling the debt will never be repaid.
It's a hell of a racket.
The scale of our housing market was revealed today in the March 2015 data out from the RBNZ. The value of all houses is 'now' $791.2 bln, and that value grew by $66.5 bln in twelve months. That is value growth going up at the rate of $182 mln per day - I kid you not. (And almost all that gain is not taxed. If it was at 30%, the public coffers would have benefited by $20 bln, representing 80% of GST.) Read more
Interest rates are now collapsing based on the pretext of falling dairy prices and low inflation to give it legs. Read more
Yeah nah. I'm as critical of the NZ property sector as the next guy. But that is valuations worked out from (back of the envelope) 45 billion in mostly GST free sales, call a thirdish capital gains without worrying about the finer detail, then compare it to Fonterra's 22 billion or so revenue.
great troll. The problem is you ignore the ability for ppl to pay. I couldnt do $600 a week let alone $1000 and I have a pretty reasonable salary, not unless its inflation adjusted, in which case it isnt real.
What you are saying is houses will go from a P/E ratio of 8 to 1 now to something like 14 to 1, ie more or less double in value. That would be way past 9 to 1 that just about everyone with a brain says is so over-priced its a risk into unchartered / impossible territory.
Look at it this way at $4000 a month in rent, I just cannot see it. The only ppl who would be able to pay that would be on $150k+ a year I would think and those jobs are few compared to the $500 a week brigade, no one would be working in Auckland certainly not me.
Chipper for my cashflow but conscious of the tenants situations. Some of the stories are a bit sad. Rent prices didn't seem to be an issue but actually finding somewhere reasonable to rent is. "Desperate" and "frustrated" is probably not an understatement for some.
There is definitely a shortage of decent rental properties. There's plenty of downside risk but if you look at simple supply and demand it's hard to see too much negatively impacting on property in Auckland in the next 2 years.
Perhaps an increasing problem is that a lot of property owners are doing what I'm doing right now - sitting on our hands.
Understandable why you would be sitting on your hands. I can see young and talented moving out of the city if this continues, why pay over half your salary for a damp dump? How did we get to this situation were finding a reasonable flat to live in is so hard and expensive. Oh thats right Auckland is now an "International" City like Sydney, Melbourne, cough New York gurgle.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=114…
Auckland is now an "International" City like Sydney, Melbourne, cough New York gurgle.
Perhaps but most certainly, price comparisons aside, I would guess that the overall standard of private rental accommodation is much, much. much worse than it is in any of those cities.
Haha, absolutely. Just did a wee trip overseas and Auckland isn't even close to being a proper city. Proper cities have adequate housing, decent public transport and you don't need to sit in traffic for two hours a day to get to your job.
At the end of the day, the standard of living for many Aucklanders is poor. As soon as the economy turns we'll pack up and leave. We're here to make money and look after family, but if the money dries up and rents increase then we're out.
Renters are mobile, we can move easily. Most young people aren't buying anymore.
BTW, the increase of $520 to $580 in Auckland over the last 3 years equals an annual increase of roughly 3.7% YoY.
When you factor in inflation and increasing Council rates and insurance costs, etc - most landlords have received bugger all additional income over recent years.
Maybe I was too generous saying it might take 5 years before rents reach $1000 pw.
Make that 3 years.
Want evidence?
Sydney is already there:
http://www.rent.com.au/property-apartment-sydney-2000-1436961
http://www.rent.com.au/property-apartment-sydney-2000-1436611
http://www.rent.com.au/property-apartment-sydney-2000-1435619
http://www.realestate.com.au/property-house-nsw-lilyfield-415734487
http://www.realestate.com.au/property-house-nsw-lilyfield-416064673
When capital gains is choked off, the pressure will go into the rents.
Auckland's not Sydney chief. I'd get paid 25% more in Sydney, there's good public transport and it's actually an international city - it's vibrant and interesting. Auckland is filled with boring old conservatives and it's only cranking because of the economy (still pretty boring though). Watch the economy turn and the effect it'll have.
But as I say, you keep dreaming...
and how much did rents drop ??? property values did but I don't recall rents dropping through the floor so doesn't change the cashflow much - so unless you are overgeared not that big an issue for proper investors - it will be the speculators who have jumped in headfirst in the last couple of years and are already topping up payments - and have no safety margin
Triple, kpnuts is correct in his observations. Tenants are not leaving the market.
It remains a fact that a house bought for the long term, prudently financed using long-term finance, is a safe investment. There is no over-supply of property in Auckland and values won't collapse.
People (including you?) have been saying on this interest.co.nz website for years now that a collapse is going to happen. All sorts of things have buffeted the economy in those years and yet houses go up in value.
By the way, in the years after the 1987 stock market crash, house prices in many parts of New Zealand rose by between 30 and 50 percent. Property prices did fall in the commercial market and that caught all the attention but housing was increasing.
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