Average rents declined in the third quarter of the year but remain up by 6.5% compared to a year ago

Average rents declined in the third quarter of the year but remain up by 6.5% compared to a year ago

Average rents declined in the September quarter of this year compared to the the June quarter, particularly in Auckland.

Interest.co.nz's latest analysis of bond data from Tenancy Services shows that the average rent across the whole country was $449 in the third quarter of the year, down from $450 in the second quarter.

In the Auckland region the average rent dropped from $531 to $529 over the same period, with falls ranging from $14 a week in Franklin to $2 a week in Central Auckland and Manukau (see table below).

The only Auckland districts not to record declines were Rodney, where the average rent jumped by $21 a week, and Papakura, where it was unchanged.

Other centres to record average rent declines between the second and third quarters were Whangarei (-$8), Hamilton (-$3), New Plymouth (-$2), Kapiti (-$1), Wellington City (-$17), Nelson (-$8), Ashburton (-$4), Timaru (-$1), (Mackenzie (-$36) and Queenstown-Lakes (-$13), while average rents were unchanged in Tauranga, Napier, Christchurch, Rangitikei  and Waimakariri.

However, the softness in rents in the third quarter of the year was not unexpected.

It is a normal seasonal pattern that most of the growth in rents occurs in the first half of the year and then flattens off or eases slightly in the second half.

So it is the annual change figures that are more important and these show that the average rent across the whole country was up $27 a week (6.5%) in the third quarter of this year compared to the same period of last year, while in Auckland it was up by $16 a week (3.1%) compared to the same period of last year.

The biggest annual increase in dollar terms was in Upper Hutt where it jumped by $55 a week, from $396 a week in the third quarter of last year to $452 in the third quarter of this year (figures are rounded to the nearest dollar).

The only district to record an annual decline in average rent was Queenstown-Lakes, where it dropped from $632 a week in the third quarter of last year to $625 in the third quarter of this year.

The table below shows the quarterly and annual movement in rents for all districts.

Average Weekly Rent $ (Quarterly)
  Q3 2018 Q2 2019 Q3 2019 Quarterly Change Annual Change
Whangarei District 375 412 404 -8 29
Rodney District 505 526 548 21 42
Waitakere City 504 527 518 -9 15
North Shore City 570 589 584 -5 14
Auckland City 514 530 528 -2 14
Manukau City 520 528 526 -2 6
Papakura District 493 517 517 0 24
Franklin District 474 493 479 -14 5
Auckland Region 513 531 529 -2 16
           
Hamilton City 395 420 417 -3 22
Tauranga District 458 494 494 0 35
Rotorua District 347 385 393 7 46
Napier City 394 439 438 0 44
Hastings District 367 382 393 10 26
New Plymouth District 342 367 365 -2 23
Palmerston North City 321 350 352 1 31
Wanganui District 275 311 325 14 50
           
Kapiti Coast District 404 429 427 -1 23
Porirua City 464 465 499 34 34
Upper Hutt City 396 422 452 29 55
Lower Hutt City 426 452 462 10 35
Wellington City 469 537 520 -17 51
Wellington Region 451 504 497 -7 46
           
Ashburton District 336 344 339 -4 3
Banks Peninsula District 341 350 384 34 43
Christchurch City 378 381 381 0 3
Mackenzie District 311 353 317 -36 6
Rangitikei District 223 265 265 0 41
Selwyn District 441 457 465 8 24
Timaru District 303 333 332 -1 29
Waimakariri District 395 407 407 0 12
Canterbury Region 373 380 381 1 7
           
Nelson City 364 406 398 -8 34
Queenstown-Lakes District 632 638 625 -13 -7
Dunedin City 342 357 376 19 34
Invercargill City 259 289 294 5 34
           
New Zealand 422 450 449 -1 27
Source: Tenancy Services bonds        

 

 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Was Auckland up $16 or $33 annually?

Job vacancy for proof reader at interest.co

he would have to pay interest.co for a job...

its clearly written, 'Annual change' $16

What about the part that says “while in Auckland it was up by $33 a week (6.6%) compared to the same period of last year.”?

They must have updated it, since it says $16 either way now.

Thanks guys, well spotted. No proof reader would be a match for our eagle eyed readers ;-)

Short term seasonal respite from a longer term strong upwards trend. There will be calls for less immigration from renters

Yes, very clear and consistent upwards long-term trend.

Sadly, learning from the past to inform future decisions is considered a cardinal sin for most commenters on this site. I'm sure we are going to hear that rents are going to fall from here on, because this time is different.

But this time is different! The rate at which landlords have had their cost increase has been much greater under this government than the previous one. Couple that with huge minimum wage increases (circa 7%) that mean renters can afford to pay more should mean that rents rise even faster than historically!

Nominal median wage growth in NZ was 2% year ended June 2019.
Something you need to understand: hourly mandatory wage growth doesn't have the same effect on median wages in the absence of productivity. Businesses just come up with ways to save costs elsewhere: smaller raises for non-minimum wage employees, fewer hours for those on minimum pay, cheaper procurement options, cutting headcount, etc.

13
up

I'd expect this drop to continue as the use of garages and tent site rental gets factored in.

I'm stock piling old corrugated iron for resale - I can see a market developing here..

Genious, Buffet's no doubt in the same game.

10
up

so we are now looking at 25-30K to rent in auckland for a year, does not leave much if you are on min wage
no wonder food banks are overflowing
and places like this need building
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12274577

lol, the spruikers have been proved wrong consistently...

they cried foul about all the changes to the rental market... and rents are now on the downward trend....

3 quarters are up and one quarter is down and well above inflation...that is consistently RIGHT. We can go to market rent on existing tenants but usually wait until a flat is vacant.

Any difference to trends before the law changes, that you can point to?

Why do you always go for point scoring rick? Rising rents (fact) above the rate of inflation (fact) are supporting house prices (fact). Since you mention it, do YOU have any statistics from 2017 YOU can quote.

Rents have a long way to go until they actually materially support house prices. New Zealand has the highest house price to rent ratio in the world: https://2oqz471sa19h3vbwa53m33yj-wpengine.netdna-ssl.com/wp-content/uplo...

Maybe in a few more years, if house prices continue to be flat and rent continues to go up, we might see ourselves get back to a point where rent has anything to do with house prices.

You're being overly emotional there, Houseworks.

You've claimed to be RIGHT. I was really just asking if you've got anything to support that claim.

I've made no claim.

thought you may have realised that Speculators don't function by judgement, but by Blind faith

Is that you, PropertyPrices2Fall? The ESOL poet.

It is indeed, and he's still wrong, 10 years running

Evil, proves you don't understand numbers...

Would love to know how you run a business, that is, if you do

Why do you want to know how I run my businesses? I very much doubt you would be willing to learn anything

It's PropertyPrices2Fall for sure! Referring to Yvil as "Evil" is a giveaway. https://ibb.co/7QZn6xm

I like your thinking BHSL..

A slanderous accusation

Wow, a proof that your initial moniker was completely against what was happening in the market, and you are now distancing yourself from that idiocy

BHSL, how you doing

DGM (ex PP2F): "rents are now on the downward trend…."

So NZ rents went down by $1 and Auckland by $2 in the last quarter but they are up by $27 and $16 over the year, you'd have to be very unintelligent to call this a downward trend

Hi Yvil,

As has been noted, the DGM are very unintelligent - and also very miserable.

TTP

Choose your words more carefully

I hate to point out the obvious, but you yourself have been latching on to a couple of months' data (sales) recently despite year on year figures being negative. The pot calling the kettle black there.

Ah, sorry. Your mistake is reading his comments and taking their literal meaning. As he has explained already, he doesn't mean the words he says. Just focus on the gist/thrust and you will understand that he is always correct.

Pick and choose as much as you like.. $16 over the year, with all the other cost, as well as recent policy changes, rents have gone backwards..

Well you wouldn't understand

Stop embarrassing yourself with nonsensical posts

Facts always hurts, its an age old phenomenon!!!

Speaking from 10 year's experience of being wrong about house prices falling, you would know

Even PropertyPrices2Fall knows not to trust his own judgement. He purchased a property in India, which may well have gone up in value by now, based on the data I found with a quick Google search.

Any thoughts on Rodney increase?
Tradies moving to where the work is perhaps with Millwater / Milldale etc

That would make sense.
Anyone know how Milldale is tracking?

If the US gets back into printing mode (and it looks like they are) then the everything bubble could be with us for a while. All those negatively effected by this should vote next year for change. We could radically restructure asset pricing in NZ by changing the tax model. Banks and debt based capital gain chasers would be unhappy...very unhappy, but everyone else would be rosy.

Read https://www.top.org.nz/top1 and vote to support productivity (work), and against debt based asset speculation.

Good article and info.Could we get these more often?I don't recall seeing one of these before.

Thanks for the feedback. We update the figures quarterly.

ChCh rents at $381 per week average seems incredibly low!
We only have 2 properties lower than this and if $381 was our average rent, then I would be trading property.
Haven’t worked it out but I would say that our average would be more like $450 per week minimum.
To be fair there are a lot of mum and dad landlords with one or two properties that don’t run landlording as a serious business and don’t mind propping their business up for some dumb reason!

"$450 per week minimum" good luck for that!

Chairman, average of $450 per week, not minimum!!!!
We have got some 3 bedders at $470.
Some4 bedrooms over $500 per week
We are professional landlords that do look after our properties.
We don’t just buy and leave as they are!!!!

God blesses you TM2, such wonderful social services you are providing to fellow human being..

Chairman, thank you for acknowledging the services that we are providing.
Just worked it out that the average over all our residential rentals is $447 per week.
We did reduce a few rents a couple of years ago or it would’ve been $450.
We provide good quality accommodation for people that require it, and if we weren’t then our properties would empty.
Our properties are all far superior to anything that the government charges for.

Whooosh!!

Id suggest he did actually understand that you were been sarcastic. But i dont know why you were as it does sound like hes provign a quality service.

Laminar I am well aware of The Chairman’s point of view.
It is great when he is acknowledging the great work that landlords in NZ do

I'm not Chairman Moa..

Prove it!!

No such thing as a professional landlord. If what he says about himself is true then he is a full time landlord. Remember he is an agent so you need to spell things out very clearly. He does not pick up sarcasm CM.

Gordon, get on the bus, they are waiting for you!

Is that the best you can say you poor old thing. Why don’t you employ someone to write your comments on this site then they will be grammatically correct and we will be able to understand what you are saying. You and Trump have a lot in common. In saying that I think you might have been at school slightly longer than him.

TM2 was held back a few years.

Gordon, don’t need anyone to write anything for me.
Haven’t heard from you whether you are ever going to take me up on the challenge that has been offered to you for years!
Don’t believe you will ever take me up on it as your funds have dried up, haven’t they GORDON?
Yes Donald Trump and myself have both done rather well investing!
Not sure how long Trump was at school for, do you know GORDON?

"Donald Trump and myself have both done rather well investing!" Yes, he did well over the misery of other people (ask the people of Atlantic City).
Anyhow, a little humility goes a long way.. did you mum teach you that TM2?

Chairman, have been to Atlantic City, and Trump provided a lot of jobs for people.
What are you talking about in regards humility?
I have got more humility than most people,I know.
We are providing very good quality shelter for people that the government can’t!
I have personally helped many people whether it be financially or other over many years!
We would never rent out housing that is the general quality of state houses!!
So not sure what on earth you are alluding to Chairman.

You are Mother Teresa of Christchurch and pearly gates will be opened wide for you.. I will email him now!

Chairman, you seem to have a chip on your shoulder that will do nothing for you.
Make sure the gates are not going to be opened anytime soon!!

A chip, you re kidding me? I have many on those who gloated!

Longer than you as he never had to resort to being a land agent like you are.

Gordon, drop that pointless dribble regarding being an agent!
I am not a real estate agent now!

Once an agent always an agent The Boy. You will always regret telling us this as it tells us so much about you. Your education background and your personality. That’s one weakness in your persona you should have kept quiet about. In saying that I assume you were always straight up with your principal vendors. That you always fulfilled your fiduciary duty to them and never compromised that relationship when dealing with buyers. After all as Chairman Moa says you are such a wonderful citizen of poor old Christchurch. I am surprised you have not received a knighthood for your benevolent acts.

Gordon, clearly you have many issues that you haven’t addressed!
Not worth answering any of your dribble!

The pot calling the kettle black The Boy. I certainly knew you were incapable of talking about professional ethics. I have noticed that you are a two trick pony. You knock Auckland as you envy it’s property values and you talk up poor old Christchurch as you know deep down it’s got limitations hence it’s very low population. Any other topic you struggle with as you need someone else to write it for you.

Gordon, what do you think about commenters attacking others persona? That's what you have just done

I presume you mean”commentators” The Boy. As I said RE agents either have no qualifications or they failed in their chosen career.

What an absolutely stupid thing to say Gordon.
You are bitter and twisted.
Your bus is about to leave for the day

LOL!!!!

I don't think the table only counts 3-bedroom and up, so there will be some 2-bedrooms or even studios driving the average down a bit.

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