About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Wednesday, November 20th, 9:59PM
rss
Latest Headlines

Rental market favours tenants

Contrary to popular opinion, the rental market is actually a tenant’s market, according to new data from Trade Me Property.

Thursday, January 21st 2016, 2:00PM

by Miriam Bell

Complaints of sky-high rents and random rent increases, particularly in Auckland, have made headlines in recent weeks.

While there can be little doubt that some SuperCity housing is rented out at a premium, it seems the truth is far more complex than is usually presented.

Trade Me Property’s December data showed that median asking rents nationwide remained static, ending 2015 the year exactly where they began - at $420.

Head of Trade Me Property Nigel Jeffries said that, while national median asking rents have gone up by 23.5% in the last five years, they plateaued in 2015 after rapid increases in 2014.

In Auckland, the median asking rent started 2015 at $480 and ended it at $495, which was an increase of 7.6% on December 2014.

Over the last five years, Auckland’s median asking price rose by 26.9%, from $390 a week to $495.

However, Jeffries said the pace of rental increase is very modest compared to the rise in asking prices of properties for sale over the same period, which topped 60%.

“We expect to see the median weekly rents tick above $500 early in 2016 and stay there, but it certainly won’t be a significant increase like we’ve been seeing in the for sale market. 

“Clearly investors in Auckland are hoping for long-term capital gains from their properties but, in the short term, the rent from their investment is a drop in the bucket on a significant Auckland mortgage.”

Further, it is not Auckland that has recorded the biggest increase in median asking rent in either the last year or the last five years.

It was Manawatu/Wanganui that recorded the largest rise in median asking rents in the year to December 2015. It was up 21.7% to a new high of $280.

And Christchurch’s five year growth - of 31.3% - represented the largest growth in median asking rents of any of the three main centres and any other region of the country.

Despite that growth trend, the Christchurch market is now weakening considerably as it adjusts following the post-earthquake rebuild, Jeffries said.

“Christchurch began 2015 with an average weekly rent of $450, but by the end of the year it was $420. Compared to 2014, median weekly rents are down 6.7% and we’re not seeing any signs of a halt at this point.”

Tenants should prepare for a rent correction nationwide in January/February as more properties come onto the market in the New Year, he added.

“There was a rent adjustment in January 2015 of about 5% on the previous month, which added $20 a week to the average weekly rent. We’d expect to see a similar jump this year.”

However, one commentator believes that the lack of income growth around the country will constrain rental growth.

Economist Shamubeel Eaqub said rents have not been doing much nationwide and nor will they - unless incomes rise which, in turn, is unlikely in the near future.

“So there isn’t actually much scope for rent raises. Until incomes rise, we won’t see much in the way of gains in rent across New Zealand - and certainly not outside areas that have supply shortages, like Auckland and Queenstown.”

In Auckland, where the rental market is tight with limited vacancies, there has been some upward pressure on rents, he said. “But that too will be constrained by incomes.”

NZ Property Investors’ Federation executive officer Andrew King said Auckland rents have not kept pace with sale prices.

That imbalance will be exacerbated by the additional costs that will come with new regulations for landlords.

“Ultimately, with any cost increase there is a chance of it flowing through into rental increases because the landlords can’t afford to simply supplement them.”

Many Auckland landlords are concerned about issues like overcrowding, he added.

“The current low interest rate environment is helping landlords keep rental increases in check for now. But, if any more regulatory costs are levied on to landlords, it is doubtful that will continue and rents are likely to increase.”

« Changing future for tenanciesMake your voice heard »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • When is a client really a client?
    “And this subtle upgrade to the understanding of a complaint. Which changes the ISO definition from an expression of dissatisfaction...”
    2 days ago by JPHale
  • When is a client really a client?
    “Just released additional standards from the FMA. Record keeping potentially until 7 years after the death of the life...”
    2 days ago by JPHale
  • When is a client really a client?
    “@ReganT interesting that the two life advisers involved with the code working group discussion are the ones being argued...”
    3 days ago by JPHale
  • When is a client really a client?
    “In a previous reply I responded to the concept of payment as a trigger. I actually agree it’s not. While we don’t often...”
    3 days ago by regant
  • When is a client really a client?
    “Tash are you being deliberately obtuse? I didnt say you have to keep sending/giving disclosure every year, I said you have...”
    3 days ago by regant
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

Last updated: 15 November 2019 4:16pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com