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Rising prices make for rising rents

Asking rents are catching up with rising asking prices in regional markets around New Zealand, the latest rental data from Trade Me Property shows.

Wednesday, July 20th 2016, 12:00AM 1 Comment

by Miriam Bell

Strong growth in property asking prices in certain regional markets has been well-reported, as has the view that Auckland’s sky-high prices are, at least partially, to blame.

Yet rental price growth has lagged behind in many regions – until now.

Trade Me Property’s June rental data has just been released and it reveals that median weekly asking rents have surged in regions near to Auckland.

The Bay of Plenty led the way with a year-on-year rise in the median weekly asking rent of 16.7%, which left it at $420 per week.

In Northland the median weekly asking rent was up by 11.9% year-on-year and in the Waikato it was up by 7.5% year-on-year.

Head of Trade Me Property Nigel Jeffries said the three regions near Auckland surpassed the SuperCity in year-on- year growth in median weekly asking rent.

This was an indication of Auckland’s continued “halo effect” in both the for sale and rental markets, he said.

“Rising house prices in Auckland have seen activity in the surrounding regions boom.”

Other regions to see significant increases in median weekly rent include Marlborough (21.7%), Manawatu/Wanganui (up 14%) and Otago (13.3%).

In contrast, Auckland rents have not kept pace with the city’s rising prices.

The SuperCity’s median weekly asking rent rose by just 3% year-on-year. This left it at $510 per week in June, which was a drop from $520 in May.

Jeffries said that Auckland might holds the spotlight in the “for sale” market, but it was a different picture for rental properties where rents have stalled.

He also noted that while rents in the Auckland apartment market continue to go up, it was at a much slower pace than in the past.

The median weekly rent for an Auckland apartment was up 2% year-on-year, but a year ago the Auckland apartment rent growth rate was around 10%.

Once Auckland was excluded, the national median weekly rent was up 5.6% year-on-year to $430 a week.

Meanwhile, just three regions showed declines in their median weekly rent: Canterbury was down by 8.1%, West Coast was down by 7.7% and Gisborne was down by 1.7%.

It was the Christchurch market which returned the worst news for landlords.

Jeffries said the consistent downward trend in the city’s median weekly rent meant times were tough for landlords with empty properties.

“In June, the Garden City entered its 14th consecutive month of rental declines as landlords weathered the economic challenges facing the region.

“The median weekly rent sat at $400 a week in June, which was down 9% on last year, and down $50 per week since June 2014.”

 

« Auckland’s rental hot spotsNo tenant liability under new rules »

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Comments from our readers

On 6 August 2016 at 3:22 pm Lizarn said:
Rents in Auckland are unlikely to rise while the number of properties for rent stay as high as they are. A three year record of inventory is continuing to dominate the Auckland rental market.

http://listings.jonette.co.nz/listings-on-trademe/auckland-rentals.html

I can only guess why - maybe more landlords from speculation on housing?

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Lender Flt 1yr 2yr 3yr
AIA 5.35 4.49 5.25 5.55
ANZ 5.54 5.15 5.85 6.15
ANZ Blueprint to Build 2.78 - - -
ANZ Special - 4.55 5.25 5.55
ASB Bank 5.35 4.49 5.25 5.55
Avanti Finance 5.45 - - -
Basecorp Finance 6.45 - - -
Bluestone 5.29 7.49 7.59 -
BNZ - Classic - 4.55 5.25 5.45
BNZ - Mortgage One 5.55 - - -
BNZ - Rapid Repay 5.55 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.55 5.35 5.94 5.99
BNZ - TotalMoney 5.55 - - -
CFML Loans ▲6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.70 5.20 -
Heartland Bank - Online 4.00 3.85 4.70 4.84
Heretaunga Building Society 5.95 4.80 5.50 -
HSBC Premier 5.49 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.25 ▲4.29 ▲5.09 ▲5.35
Kainga Ora 5.43 4.57 5.58 5.85
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 5.00 5.55 6.19 6.39
Kiwibank - Offset 5.00 - - -
Kiwibank Special 5.00 4.55 5.19 5.39
Liberty 4.84 - - -
Nelson Building Society 5.95 4.95 5.85 -
Pepper Essential 3.44 - - -
Resimac 4.59 5.60 6.16 6.29
Lender Flt 1yr 2yr 3yr
SBS Bank 5.29 4.69 5.35 5.49
SBS Bank Special - 4.19 4.85 4.99
Select Home Loans 4.09 4.29 4.86 5.09
The Co-operative Bank - First Home Special - ▲4.19 - -
The Co-operative Bank - Owner Occ 5.45 ▲4.29 5.19 5.45
The Co-operative Bank - Standard 5.45 ▲4.79 5.69 5.95
TSB Bank 5.59 ▼5.14 ▼5.79 6.15
TSB Special 4.79 ▼4.34 ▼4.99 5.35
Unity 5.65 4.80 5.50 -
Wairarapa Building Society 5.24 4.55 5.20 -
Westpac 5.54 5.09 5.79 6.09
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.54 - - -
Westpac Special - 4.49 5.19 5.49
Median 5.45 4.55 5.25 5.52

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