The cost of renting somewhere to live in Auckland has increased by 8.4% in the last 12 months, according to Trade Me Property.
The median asking rent for Auckland homes advertised on the website was just $1 short of $500 a week in August, up 8.4% compared to August last year.
That is in stark contrast to the median asking rents in Wellington, which were unchanged from a year ago, and those in Christchurch which were down 4.7% compared to August last year.
"Median asking rents in Auckland have rocketed up," the head of Trade Me Property, Nigel Jeffries said.
"You're now looking at $499 per week for a typical [Auckland] property, taking annual rent costs close to $26,000, about $2000 more than a year ago.
"It piles more pressure onto the cost of living for tenants," he said.
The biggest increases in Auckland were for apartments, which had an average asking rent of $460 in August, up 12.2% compared with a year ago.
That was followed by townhouses which were up 10% to $550 a week, 1-2 bedroom houses which were up 8.6% to $413, and home units which were up 8.1% to $400 (see chart below).
The smallest increases were for large houses with five or more bedrooms which were up by 3.5% to $735, and 3-4 bedroom houses which were up 5.8% to $550 a week.
In Christchurch, the biggest fall in median asking rents was for 3-4 bedroom houses, which were down 7% for the year to $465 a week, followed by large houses with five or more bedrooms which were down 3.6% to $675, while townhouses declined by 3.4% to $430, and home units which were down 2.9% to $330.
Jeffries said asking rents in Christchurch had declined for three months in a row.
"The Christchurch rental market was extremely hot two years ago, with asking rents rising more than 13% year on year," Jeffries said.
"In March this year it peaked at a weekly rent of $495 to surpass Auckland, but across the remainder of 2015 we've seen rents ease right back and Christchurch tenants are now being asked to pay $3400 less a year."
Across the whole country the median asking rent for all types of homes was $420 a week in August, up 5% compared to August last year.
But when Auckland listings were excluded from those figures, the median asking rent for the rest of New Zealand was $360 a week, up 2.9% compared to a year earlier.
37 Comments
Auckland certainly resonates with recent research undertaken at Harvard.
... by now everyone knows that the artificially suppressed, "hedonically-modified" and seasonally-adjusted inflationary readings is what has permitted the Fed to not only grow its balance sheet to $4.5 trillion but to keep rates at 0% for 8 years. Because "how will the economy recover if there is no broad inflation", the Keynesian brains in the ivory tower scream, demanding more, more, more easing just to push inflation higher.
There is only one problem with this: it is all a lie - just ask any average American whose cost of living has soared in the past decade.
Still, with reality diverging so massively from the government's official data, reality just had to be wrong somehow.
.Turns out reality was right all along, as revealed by the latest "State of the Nation's Housing" report released by the Center for Housing Studies at Harvard, which showed that while inflation among most products and services may indeed be roughly as the Fed and BLS represent it, when it comes to rent - that most fundamental of staple costs - things have never been worse.
According to the report, for American renters 2013 marked another year with a record-high number of cost burdened households - those paying more than 30 percent of income for housing. In the United States, 20.7 million renter households (49.0 percent) were cost burdened in 2013.
It gets worse: a whopping 11.2 million, or more than a quarter of all renter households, had "severe cost burdens, paying more than half of income for housing." The median US renter household earned $32,700 in 2013 and spent $900 per month on housing costs. Renter housing costs are gross rents, which include contract rents and utilities. Read more
There you have it. I and a number of others have been predicting this and many on here have argued against our claim rents will rise substantially in Auckland.
Now I'd like to see similar reports on wages rises but I'm not going to put my money on that prediction.
Give yourself a pat on the back. Now ask yourself is this a good thing, or should we limit immigration until things are a bit more balanced?
As Bill English noted immigration is keeping wage growth subdued, in the meantime rents increase in Auckland due to immigration..beggars belief!
It's a catch 22. Are you aware of all the development planned for Auckland? We don't have enough of the right skills in NZ at present to undertake it all. We need immigration if we want the development to go ahead. Yes immigration puts upwards pressure on house and rental prices.
What do we do? Slow down the development or bear high house and rent prices? I say go ahead with the development full steam ahead but I have property and my income is tied to development so I am bias. In the long run I do think it is the right thing to do for the future of Auckland / NZ.
All the best. Sorry you feel bitter about it. On the flip side I and many of my friends are very happy in Auckland. From tradesmen to professionals we are all doing well. We are mid 30's so maybe a slightly older generation than you frazz? I think the big difference is we have fairly low mortgages having bought our homes at least a few years ago. If I was starting off now I'd probably go to Hamilton or Tauranga. Like many main cities around the world Auckland is best enjoyed if you have a bit of money. I remember living in Sydney in my early 20's. Couldn't stand it and couldn't believe how expensive it was. Looking back from today's prices, it was cheap then!
Interesting. I've talked to many professionals in Auckland who don't seem too thrilled with the place. I've even had people ask me if they can find a hardship post similar to what I've been doing in Vietnam just to escape what I refer to as salary oppression. Even the relatively high salaries in Auckland don't go too far in PPP.
Immigrants building houses for immigrants building houses for immigrants building........
If that is not a Ponzi then JK has a country to sell you.
The NZ situation economy is a lot like Ireland was in the mid 2000's. Sucked in immigrants and returning Irish and away they went building houses. From memory their stock market lost 90% when the tide went out and housing halved over the 5 years after the GFC. Can someone tell me why it won't be different here and please don't say we are cleverer than the Irish?
"Now ask yourself is this a good thing, or should we limit immigration until things are a bit more balanced?"
Wrong question, unless you are an MP, or a senior Councillor, or engaged in developing rules and policies. The right question to ask yourself would be: “How do I use all this information so that I and my family benefit from it?”
Do you come to this site to get better informed and use the info, or do you come here to talk as if you make this land’s rules and regulations?
For the last ten years or so internal migration in New Zealand has been out of Auckland. Put simply, for every few people who move to good prospects in Auckland there are even more Aucklanders who find even brighter futures moving to other parts of New Zealand.
So many common taters like Alex13 believe that because they find it better in Auckland, everbody else does. Not true Alex. You are in the minority. And quite possibly you are doing poorly there, but haven't worked that out yet.
Posted the link to to the stats dept many times.
I'm not so sure KH. We could turn that around and say because you find it worse in Auckland you think everybody else does. You are in the minority.
It would be a good survey to do. I suggest the numbers speak for themselves. If people were doing so poorly here and it was so wonderful elsewhere there would be an exodus.
Sure I could sell up and retire early, mortgage free in Gore. With all due respect to Gore-ians that's not my cup of tea - or the majority of young NZ'ers who like the lifestyle of a great city.
LoL Machiavelli the survey has been done and the 'numbers speak for themselves' --are speaking the opposite of your assumption. Migration in/out Auckland to Rest of New Zealand. The net flow is out. The people are voting with their feet.
Of course there are heaps of people who are moving to Auckland and loving it for good reason. But bigger numbers moving in the opposite direction for the same thing.
http://statisticsnz.govt.nz/browse_for_stats/population/Migration/inter…
As for Mumbai to Auckland migration. Seems clear Auckland is the net destination. But that's another story.
What did you expect?
Of course rents will rise, and rise and then rise some more.
It's not only pressure on the market from a rapidly growing Auckland population not to mention the undersupply, it's also the new RB rules and regulations which hit first home buyers the hardest.
Worse still investors are now hobbled by requiring more deposit thus slowing down the supply of rentals onto the market.
Meddle with the free market at your peril, as many will soon find out.
See this page:
Olly Newland
"'Ignoring the law of unintended consequences'"
The money being sucked out of pockets for mortgage payments and rent must be affecting businesses such as retail shops and eating places. New Zealanders are not exactly paid a lot so how the heck are they all surviving in Auckland where the housing costs are so high relative to the rest of the country. Are they not eating?
Piddling inflation rates all round NZ..
But let us change the subject...for the real inflation mean.
Get with the program...screw the sick.......and the needful.
Some burghers will do anything for a crust.
You can bet your life on other things...Inflation is going through the roof....and it is not in houses. Though you might have to sell yours to survive.
Here is the reality....of how you can hedge your bets on a better life....
C/O a Hedge Fund manager, taking the place of god...and taking the prize for the biggest rip-off since I was a lad.
If you need to keep taking the tablets....beware of what you catch....and this might catch on..with other drug dealers.
It might break the bank, the bounds of ethics and kill ya in the process.
Cos inflation has really hit where it really hurts. Plus GST f imported.. of course.
http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in…
..based on the economic fortunes of most at the moment, one wonders how rents can rise. I imagine its due to more bodies occupying the same space - such as many of our recent migrants are used to/happy with? Seems such a formulae still relies on cap gain as the saviour. For most the rents would still be insufufficient to have a decent maintenance/upgrade progarmme in operation - leading to a physicall eternally deteriorating asset.
Of course rents can rise, you just have to pay more rent and have less money for other things. I heard the average rent is now $490 a week so with falling interest rates its an even better time to buy a house, good luck finding one. So glad I got into property 10 years ago or I would be totally screwed now. Could have sold and taken the easy way out at the time when I split with the Ex but decided to keep it.
Your landlord have a look at the headline article about Auckland property in the Herald this morning. Is it the beginning of the end? The Herald for financial reasons have been a great friend of the Auckland property market. For them to put such an article in their paper is surely telling. For me the biggest factor that will slow it down is the IRD registration requirement. A lot of people have not paid tax on their sales and they simply do not want the IRD to catch up with them.
Hi gordon, yup I agree that it seems the Auckland market has peaked price-wise. It reckon it would be foolish now to buy a property hoping to sell in a few months for a profit. Mind you that is a foolish thing to do at any time in my opinion.
Lots more new developments coming on to market in the months ahead too so there will be minimal price rises for the next few years.
The yield on properties will become a more important factor now.
Guys, no-one has flagged this, this is "Trade me asking rent", seems everyone is counting eggs here, not chickens. This does not mean existing rents have risen, it does not reflect that they may negotiate a lower rent, or have no takers until it drops. Also does not reflect higher occupancy as spare rooms, garages and studies are pressed into use and room sharing spreads the cost and lowers overall demand.
There comes a point where tenants will decide they should not pay extra for the landlords folly and greed.
Is this not basic economics?
Well spotted. I've studied and game'd the rental agents. They run a dutch auction. List a big family house at 1400 pw. Wait two weeks - no suckers. Drop to 1200 pw and a week later they'll drop a hint that the landlord will take 1100. Sign contract for 1000 or 1050 with agent agreeing to spending on garden etc.
In Auckland rentals at this level are a buyers market. They fall over themselves if you are a family / vaguely respectable. Asking prices typically 30% more than achieved rate. I doubt that is the case at lower rent levels, probably more like 10-15%.
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