The median asking rent for homes advertised on Trade Me Property jumped by $15 a week last month, rising to $435 a week nationally compared to $420 in December.
However renters Auckland and Christchurch fared better than those in other parts of the country.
In Auckland the median asking rent increased by just $5 week, up from $495 a week in December to $500 a week in January. And in Christchurch it was unchanged at $420 a week.
There is usually a jump in rents in January which is traditionally one of the busiest months of the year in the rental market, as students seek to set up new flats and people relocating for work look to be in their new homes by the time businesses resume after the Christmas break.
Auckland 'plateau'
In Auckland the median asking rent for 3-4 bedroom houses rose by $10 a week to $560 in January, while smaller 1-2 bedroom houses increased by $10 a week to $410.
However the asking rents for Auckland home units and apartments were both unchanged from December to January, at $400 and $450 a week respectively.
Compared to January last year, asking rents in Auckland were up 4.2% overall.
"Rents in the City of Sails have been hovering around the $500 a week mark for some time and don't look like changing drastically in the coming months," Trade Me's head of property Nigel Jeffries said.
"This plateau indicates a good supply of rental properties."
Down $75 a week from peak
In Christchurch the median asking rent for 3-4 bedroom houses was unchanged between December and January at $450 a week while the asking rents for 1-2 bedroom houses dropped by $20 from $360 to $340 and home units were unchanged on $330 a week.
According to Trade Me Property, the median asking rent in Christchurch has declined year-on-year for 10 consecutive months and was down by $75 a week since its peak early last year.
Wellington rents up
However asking rents were up sharply in Wellington, rising from $410 a week across all property types in December to $450 a week in January.
Three to four bedroom houses in the capital took a massive jump, rising from $460 a week in December to $520 in January, while 1-2 bedroom houses were up a more modest $10 a week to $350.
There was also a big jump in asking rents for home units in Wellington, which rose from $308 a week in December to $340 in January while apartments increased from $420 to $440.
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32 Comments
The news keeps getting bad for Auckland investors. House prices are dropping and rent is stabilizing. That negative gearing is not looking so attractive now. Losses are not being covered by capital gains. Look for more houses hit the market as those who bought in recent times get out in attempt to minimise their capital losses. They could not be told. Markets are markets. Never a straight line up.
Rents increase much faster than the rate of inflation in Auckland and you think that's bad for investors? Interest rates have gone down significantly therefore so have investors costs. Basically we have increasing revenue and decreasing costs. Not sure why that is bad.
That time frame is meaningless. A few facts.
Sales slow and prices generally decline during the Christmas period every year. An ex agent should know this.
Rates increased less than rental income.
Insurance and maintenance costs not rising excessively.
Interest savings far exceed any increases in other holding costs.
Property prices up over the past year.
Auckland still has a housing shortage.
The Auckland population is still expected to grow.
The returns more than justify property investment. Look at the facts over the last 50 years.
And lastly, most landlords do maintenance.
If you keep yelling M you will soon believe your own fairy stories. Go ask tenants just how much maintenance their landlords are carrying out on their rentals. 2 to 3 % returns at best in Auckland do not justify much if any maintenance being carried out on them. Why would you keep a house up to scratch anyway as tenants do not look after them generally.
Ex Agent each investor is different and their debt loadings will be different.....so you can't go putting everyone into the same box......there is always going to be some tenants who trash and some who look after the house like it is their own and the same with some landlords who are slack or fail to do maintenance and others who keep their property up to standard....again you can't go putting them into the same box.
Spot on. All my tenants look after the properties. I do regular maintenance. Call us old fashioned but we kinda feel like we have an obligation to each other.
So much equity has been generated in recent years, spending a bit on maintenance is a drop in the bucket.
Well done M but your benevolent attitude is rare amongst your fellow investors. When the return is so low the last thing people want to do is pay out for maintenance and repairs. Rates ,insurance, mortgage payments and a little for personal living expenses do not leave much in the kitty.
I haven't noticed any price drop around me in the Auckland DGZ. Close by three properties recently got pre-auction offers. There's hardly anything for sale. Interest rates have fallen and quality tenants are easy to find. I guess it is still location, location, location that is the number one rule. Most property investors know the rate of increase is not always "a straight line up", more of a jagged line up. In Central Auckland most will now have massive capital in their properties and will be able to absorb a drop. We haven't gone out on spending sprees. Indeed Auckland property owners remain frugal much to the consternation of high end goods sellers. I get the impression that ex-agent sold up in 2008 and is desperate for bad news even claiming rent up and interest down is sign of the end times.
I see Auckland rated again as being in the top ten of best cities to live in the entire Universe. Times have changed, people can buy their way to citizenship and there are millions of very wealthy people on the planet. Where are they going to choose to live and educate their children? In the best cities that's where.
Location, location, location on a global scale. You carry on ex-agent. Let's see what happens.
Zachary - if it's one of the top ten best cities in the world, why does everyone look so unhappy when I see them stuck in traffic driving to and from work, worrying about how they're going to afford to pay their mortgage? Worrying about 'what happens if the bubble bursts'. I step off the plane at Auckland Airport and there is a vibe of unease amongst the people. What a fantastic lifestyle....good for you!
I love living in Auckland. I live within a short walk to One Tree Hill and just seven minutes from my work in the city so maybe it looks a bit different to me. This is where most of my investments are too. I look after my tenants and fix things as soon as they need doing. I spoke with a tenant the other day, sort of hoping he was thinking of leaving, as I would like to do renovations but they love living here too.
I think most Landlords are cautious folk and like to leave plenty in reserve for disasters like needing a new roof or something. I only dip into revolving credit to pay a deposit on a new rental property.We have contingency plans in place to fall back in the event of a disaster, maybe sell the nice home we live in and downgrade to one of the rentals. All my rentals I would happily live in. I get agencies to manage the tenants. My car is twenty years old but it is good for carting stuff to the rubbish dump when I need to clean up a property. I'm typing this on a brand new laptop I got for $300. My kids get the nice Apple stuff.
I think many investors don't really believe in their paper values - only when we sell. We can't believe our luck.
The other factor I don't see mentioned is the existence of double income families who own their own houses outright. One income can be used as a sort of investment fund almost in its entirety and rental properties are purchased using that. A bit like in the old days when a couple devoted one entire income to the mortgage. That habit never stopped and now it goes into extra property. Does anyone else look at it that way?
The supply of Auckland rental properties is running about 15% above last year. The rush of investors to buy before October RBNZ changes increased the supply of rentals. Now investors are more likely to be sitting on their hands, so we should see the supply shrink over 2016. Expect to see Auckland rents rising again by this time next year.
The premium was always going to come off in Christchurch. I have noticed lots of "For Rent" signs hanging around the city.
I have been wondering if it is getting harder to sell property as well as I see a few agents trying out weekend auctions. FHB are being targeted aggressively in most advertising campaigns.....Agents have had a definite change in tactics.
Yes Skudiv, what we have been going through in recent times is the creation of a massive divide between the propertied class and the rest . This has always been the case except for four decades after WW11 where it would have been seen to be too obviously ungrateful, even for a National government, to stick it to returned soldiers. Hence the likes of my father who received a loan of 3 % which enabled him to start a family with the dignity of owning his own home.
There are probably many families priced out of today's housing market and having to rent. Many of these families would have had fathers, grandfathers, and great-grandfathers who fought for their country in two horrific wars: WW1 or WW11 .
These ancestors must be turning in their graves at how their descendants are now been treated
by the current neocon government.
I for one would be doing some serious protesting if I were in this position.
None of this information is accurate. Firstly; Trademe prices are only asking prices and if these are rentals advertised by agencies the actual rent is $50-$70 less as this is the weekly management fee charged. Secondly; the area in which the properties matters hugely so this rubbish posted here is absolutely useless. If you use the Tenancy Tribunals lodged bonds data you'll see that rents are very different for specific (like for like) properties.
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