Rents skyrocketed in many parts of the country in the March year but not in Auckland or Christchurch

Property

Average rents increased by more than 10% in many parts of the country in the year to March but growth was much more subdued in Auckland and Christchurch

29th Apr 20, 8:07am by Greg Ninness

There were huge residential rent increases in many parts of New Zealand over the 12 months to the end of March, although rent increases were much more subdued in Auckland and Christchurch.

The percentage increases in average rents surged into double digits in many centres between the first quarter of last year and the first quarter of this year, according to interest.co.nz's analysis of bond data collated by the Ministry of Business, Innovation and Employment's Tenancy Services division.

Those areas with double digit percentage growth were Rotorua, Hastings, New Plymouth, Palmerston North, Whanganui, Porirua, Upper Hutt, Lower Hutt, Mackenzie District, Rangitikei District, Dunedin and Invercargill.

However rental growth was much more modest in Auckland, where the average increase was just 3.6% for the region.

Within the Auckland region rental growth between the first quarter of last year and the first quarter of this year ranged from 0.2% in Franklin to 4.3% in the central Auckland suburbs.

In Christchurch the average rent increased by 2.5% over the same period.

Across the entire country the average rent was $461 a week in the first quarter of this year, up $23 a week (+5.4%) compared to the same period of last year (see the table below for the average rents and annual percentage changes in all districts).

The smallest percentage increase over that period was in Franklin on Auckland's southernmost flank where the average rent rose by just 0.2%, while the biggest percentage increase was in Mackenzie District in the South Island, where it rose by a whopping 54.6% and that followed a 21.6% rise in the previous 12 months (Q1 2018 to Q1 2019).

The most expensive place in the country to rent a home is the Queenstown-Lakes District where the average rent in the first quarter of this year was $650 a week, followed by Auckland's North Shore at $602.

The cheapest place to rent was was the South Island's Rangitikei District where the average rent was $275 a week.

Rangitikei was the only district in the country where the average rent was below $300 a week.

However the first quarter figures are overwhelmingly based on rental bonds received by Tenancy Services prior to the commencement of the COVID-19 lockdown.

It is too early to say what effect the lockdown may have had on rents around the country.

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Average Residential Rents Q1 2020
District	Rent $	Change from Q1 2019
Whangarei District	424	6.7%
Rodney District	542	3.2%
Waitakere City	526	2.8%
North Shore City	602	3.8%
Auckland City	546	4.3%
Manukau City	541	2.1%
Papakura District	509	0.5%
Franklin District	482	0.2%
Auckland Region	544	3.6%

Hamilton City	433	7.1%
Tauranga District	505	5.3%
Rotorua District	415	16.8%
Napier City	432	6.7%
Hastings District	406	12.8%
New Plymouth District	391	10.1%
Palmerston North City	365	19.2%
Whanganui District	350	19.9%

Kapiti Coast District	463	9.6%
Porirua City	517	11.2%
Upper Hutt City	470	14.0%
Lower Hutt City	495	11.9%
Wellington City	584	8.6%
Wellington Region	558	9.2%

Ashburton District	350	4.0%
Banks Peninsula District	426	9.5%
Christchurch City	402	2.5%
Mackenzie District	391	54.6%
Rangitikei District	275	13.2%
Selwyn District	461	1.8%
Timaru District	333	4.6%
Waimakariri District	407	2.0%
Canterbury Region	399	3.0%

Nelson City	421	8.5%
Queenstown-Lakes District	650	7.2%
Dunedin City	398	13.7%
Invercargill City	306	15.1%

New Zealand	461	5.4%

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41 Comments

by Crazy Horse | 29th Apr 20, 8:23am 1588105438

To quote one of the best Australian movies ever made, "The Castle" ........ ya dreaming mate !

by Simon | 29th Apr 20, 8:28am 1588105687

Bond data mate so the dream has already happened.

Nearly 20% increase in rent across Palmy, never seen anything like it - thank labour government my cashflow has never been better

by Crazy Horse | 29th Apr 20, 8:34am 1588106079

Simon, quoted from above ....."It is too early to say what effect the lockdown may have had on rents around the country"

by tothepoint - d… | 29th Apr 20, 11:22am 1588116120

Hi Simon,

Well noted.

The growing student population is what's driving up rents in Palmerston North.

And rents are damned high there given the standard of rental accommodation = grotty student flats.

PN is a fantastic city for property investment...... A goldmine for astute landlords.

TTP

by Chairman Moa | 29th Apr 20, 12:09pm 1588118955

I hope you guys are not expecting the overseas students to come back at any time soon, because they won't be able to until 2021 and that the forecast from all universities.

by jimmyH | 29th Apr 20, 9:26am 1588109207

Greg. Developing story line to investigate in Trademe rental listings?.. I am seeing about 50% increase in available listings in last four weeks in Auckland region And Auckland city(1700 increasing to 2400 +.)Is there any hard data available? Interested to see.

by Fritz | 29th Apr 20, 9:50am 1588110631

Yep. If interest could provide a piece on that it would be good. I am just ready to make another little contribution....keep the punters happy!

by brisket | 29th Apr 20, 9:48am 1588110488

The question is, why?
We haven’t seen double-digit growth in population, or in wages. The market is not working. It’s important to get this right, because it affects our whole economy — I don’t believe we have a low-wage problem so much as a high-rent problem.
Anyway, those Queenstown rises are an artefact now for sure. We’ll see about the rest in due course...

by Ralph | 29th Apr 20, 10:20am 1588112423

Because government policy has been to drive out private investment from the housing market, this is simply a measure of their success.

Private investment has probably been leaving that market, leading to a shortfall. And if the government continues on this course I predict the next major development will be rental properties that remain empty because the private investor can no longer afford the risk of renting. The government will then cry 'market failure', or something similar.

by Averageman | 29th Apr 20, 10:17am 1588112239

Could this be higher end ex Air BnBs renting at a higher rate. Areas showing massive rent growth have not discovered gold, far from it, their tourist economy has been destroyed.

by lastredact | 29th Apr 20, 10:18am 1588112281

I might move to Queenstown and work remotely from there. Picturesque scenery for bargain accommodation. It'll be quiet there too, which I like.

by J.C. | 29th Apr 20, 2:17pm 1588126628

I might move to Queenstown and work remotely from there. Picturesque scenery for bargain accommodation. It'll be quiet there too, which I like

Spooky down in the town at night I suspect. Bogan badasses from the region will come into town and drink in their cars. They used to go into the bars just to pick a fight.

by lastredact | 29th Apr 20, 3:31pm 1588131083

Well I come from a bogan southern town, so I suppose it could wind up being deja vu. But I won't be going out for a weekly fight outside Fergburger on a Friday night.

by Chairman Moa | 29th Apr 20, 10:26am 1588112788

Noooo not CHCH, surely? CHCH is growing rapidly...

by frazz | 29th Apr 20, 10:33am 1588113226

Were's the MAN when you need him?

by gordon | 29th Apr 20, 10:41am 1588113699

The Boy will be busy working on some of his so called stock trying to get them fit for sale as hard times are a coming. Having too many eggs in one basket is not a smart position to be in. I tried to tell him but he always knew best. That is why he has been so grumpy lately. He should be thanking Labour as they have saved the old boomer from getting sick from the virus. National would not have done so well.

by Nzdan | 29th Apr 20, 11:33am 1588116819

Fortunately he always buys well under true market value, so he shouldn't lose any capital when selling even in a severe downturn.

by Pragmatist | 29th Apr 20, 11:52am 1588117975

Psst, I've got a nice bridge, one lady owner, never raced rallied or rolled..

by gordon | 29th Apr 20, 1:06pm 1588122413

Yes he is certainly a legend in his own mind.

by printer8 | 29th Apr 20, 10:50am 1588114243

Comments so far have not mentioned influence of Accommodation Supplement.
Reality is that accommodation supplements are currently distorting rents and will continue to do so in the future even as unemployment grows. There has been upward pressure on rents as WINZ meets increases in rents as long as they are "in line with market rents" - a circularity situation and that doesn't look like its is going to broken with more in receipt of benefits.
I expect the anti-landlord element on this site are going to choke on this.

by brisket | 29th Apr 20, 1:34pm 1588124098

You could probably count me as one of the anti-landlord brigade and I agree totally. Accommodation supplement is a massive, market-distorting suckhole of taxpayer money straight into landlords’ pockets. Stupidest idea since ‘market rates’ for state housing.

by RealAgent | 29th Apr 20, 11:03am 1588114994

The biggest reason rents go up is to cover Rental agencies fees. Rental Agencies are out there convincing landlords that they can't or shouldn't be dealing with tenants directly. This fee the agency charge simply gets added onto the weekly amount the landlord wants/needs, so the tenants are paying 10% more than they should. Landlords don't need an agency to handle tenants, they can do it themselves and until recently they always did. Experience has proven that by forming a personal bond with your tenant, they are less likely to be late on rent and they will look after the property better.

by ShoreThing | 29th Apr 20, 12:11pm 1588119101

Agree, in my experience as a tenant most "property managers" are hopeless or downright negligent. I remember in one flat the shower lining had started leaking quite badly, so I rang up the manager and let her know about it. It was running through a channel and under the vinyl flooring so could do some unnecessary damage if left unchecked. She basically fobbed me off, said she'd let the LL know but money's tight you know etc etc. A week later I ran into the landlord at the supermarket, he lived locally, and asked him if he'd had a chance to get someone to look at it, as the vinyl was now lifting and the floor softening. He hadn't heard about it all! He came over that evening and took a look, and had a tradie in the next day to sort it out. Felt a bit sorry for the guy as the PM clearly hadn't bothered to let him know.

by RWC | 29th Apr 20, 11:23am 1588116215

I live in Auckland CBD - been with my landlord for just over 4 years now. Given the apartment and rental stock that has come into the market, with more to come, the landlord has agreed to discount my rent by 20% but only if I fix for 12m.
Since I have been with them, I only had on small rental increase, from 580 to 600/week about a year ago. Starting this May, I will be paying 480pw.
I would say I am a solid tenant. Never missed a payment, caused trouble or damage. Only had the washing machine replaced, but that was like 15 years old.

by Fritz | 29th Apr 20, 12:10pm 1588119024

Thanks for that anecdote.
As I have said before, prices and rents in the CBD will dive.
Your landlord is clearly astute.

by Averageman | 29th Apr 20, 1:57pm 1588125438

Win, win. Well done.

by Voiceofreason | 29th Apr 20, 11:31am 1588116708

I'm simply amazed at how much forced positive sentiment is still being put out there, instead of being objective. It's about keeping confidence up, which is necessary for the market and industry to keep afloat, I understand that; but I mean, it seems Bindy Norwell is incapable of saying anything negative about the outlook, even amid a global pandemic and some of the worst forward-looking global economic data in about a century: https://www.stuff.co.nz/life-style/homed/300000731/six-days-of-lockdown…

by Fritz | 29th Apr 20, 12:07pm 1588118856

The spruikers are back in full force!

by Fritz | 29th Apr 20, 7:54pm 1588146843

by Yvil | 29th Apr 20, 2:29pm 1588127370

by Randomman | 29th Apr 20, 12:24pm 1588119844

Remember this was asking $1200pw
Now reality has hit, only $550!
Rents ain't going to go up anywhere for a wee while me thinks..

https://www.trademe.co.nz/a/property/residential/rent/wellington/wellin…

gingerninja | 10th Apr 20, 10:45am
10
up
And in Wellington, the listings of overpriced ex Air B&B's has begun https://www.trademe.co.nz/a/property/residential/rent/wellington/welling...

by THE MAN 2 | 29th Apr 20, 12:34pm 1588120489

The Man is certainly not preparing his rentals to sell, as firstly they are all fully rented until next year and secondly because they are giving far better returns than anything else, by a long way.
ChCh rents haven’t been escalating and that is because it is the most stable market in the country, been saying this for years.
Personally believe ChCh is going to recover a helluva lot better than most other parts of NZ as it is a desire able place to live.
Yes there will be redundancies in hospitality but the building industry will be ok.
Prices of building will certainly not be dropping, quite the opposite.
Landlords have been hit by a government that is not that user friendly but we are continually getting pay rises due to fixed rate loans expiring and interest payments decreasing significantly.
This past year our interest payments have decreased by over 35k, which isn’t too bad, with more on the way.

by gordon | 29th Apr 20, 1:09pm 1588122567

"Desirable place to live." Pull the other leg the Boy. Your very small population and the price of your housing certainly proves that comment to be very far from the truth. In fact you will become even less relevant as more people than ever will move for work and business opportunities. What little tourism you had is gone for a very long time.

by THE MAN 2 | 29th Apr 20, 1:32pm 1588123955

Gordon I think you have some infatuation with The Man’
I am not sure that it is overly healthy as I am heterosexual and happily married.
The jealousy element is also questionable as to being healthy for you!
ChCh has the second largest population in NZ so you have no idea about what you are stating

by gordon | 29th Apr 20, 1:39pm 1588124361

Why the low house prices The Boy? Some rural areas in the North Island are obviously far better places to live than poor old Christchurch.

by THE MAN 2 | 29th Apr 20, 2:24pm 1588127088

Gordon, what low prices are you talking about?
The rents in ChCh for professional landlords are a helluva lot better than what they are than in Auckland and Elsewhere?
Are they achieving rents at the moment of in excess of 6% p.a.?
Admittedly you pay a lot more for houses in Auckland than in Christchurch, but we all know that is due to the overseas buyers that we all know exist there now.
There would be more overseas born people in Auckland than NZ born buyers and hopefully it doesn’t transmit to ChCh, however I wouldn’t guarantee that, looking around.
If you want to pay $800k for a house in Auckland when I can buy the same thing for half of that, then I say go for it.
Real Estate investing in ChCh, has made us wealthier than I could’ve ever wished for 15 years ago.
Don’t bother replying Gordon, because it will be the same of dribble about ChCh, when you are totally incorrect.
Soon be your afternoon tea time

by Chairman Moa | 29th Apr 20, 3:45pm 1588131904

Hell CHCH is just a metropolitan version of Tokoroa or a big brother of Invercargill.. Standard issued clothing items are black Jean and black bomber Jacket.

by Fritz | 29th Apr 20, 7:55pm 1588146956

And number one haircut.

by Fritz | 29th Apr 20, 7:55pm 1588146934

I think you have some infatuation with yourself. Who else would call themselves ‘the Man’ but a self-infatuated person!

by Speechless | 30th Apr 20, 3:24am 1588173886

"fully rented until next year"

Fully rented until your tenants start going broke. Fixed it for you.

by IT GUY | 29th Apr 20, 2:17pm 1588126641

It feels like this news should be wrapping fish and chips......