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Average nationwide rent on newly tenanted properties up 6.5%, but Auckland and Queenstown differ from the rest of New Zealand

Average nationwide rent on newly tenanted properties up 6.5%, but Auckland and Queenstown differ from the rest of New Zealand

The average rent charged on newly tenanted properties across New Zealand was $30 a week higher in the first quarter of this year compared to the first quarter of last year, according to interest.co.nz's new Residential Rent Report.

The report measures the average rent and the number of bonds deposited in 30 major urban districts around the country every quarter, based on bonds received by Tenancy Services.

Because bonds are usually paid at the start of a tenancy, the report is a leading indicator of movements in market rents, reflecting rents agreed between landlords and tenants at the start their tenancies.

It shows that in the first quarter of this year the average rent charged for the whole of New Zealand was $491 a week, up by $30 a week (+6.5%) compared to the first quarter of last year.

Across the 30 districts measured, average rents ranged from $344 a week in Invercargill to $614 a week on Auckland's North Shore, (see table below for the average rents in all 30 districts).

The only district to record a decline rent over the year was Queenstown-Lakes, where the average rent declined to $520 a week in the first quarter of this year, down by $130 a week (-20.1%) compared to the first quarter of last year.

There were also two districts where the average rent was unchanged from a year ago - Ashburton and Auckland Central.

Auckland Central includes the city's Central Business District and all of the suburbs that were located within the boundaries of the former Auckland City Council prior to their amalgamation into the current super city, an area that stretches from Otahuhu in the south to Avondale in the north-west.

The average rent in the district would have undoubtedly been impacted by the decline in overseas students coming into the city because of the COVID pandemic and the downward pressure this has put on rents for shoebox apartments in Auckland's CBD.

The fact that the average rent was static in Central Auckland compared to a year earlier is particularly significant because it is by far the most active district in the country for rental activity, with 6533 bonds lodged in the first quarter of this year, well in excess of any other district and representing 48% of the bonds lodged in the Auckland region.

Rental growth was also low on Auckland's North Shore at 2%, which accounted for another 15.2% of the bonds lodged in Auckland in the first quarter of 2021.

The biggest increase in dollar terms occurred in Napier where the average rent was up by $67 a week (+15.6%) compared to a year ago.

Overall, the rental market was also significantly more active at the beginning of this year, with 38,813 new bonds lodged across NZ in the first quarter, which was up by exactly a third compared to the first quarter of last year.

The table below shows the movements in weekly rent and the number of bonds lodged in the year to March in the main urban districts. The interactive graphs below the table show the movement in average rents since 2004.

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Average weekly rents - Auckland districts

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The 'Auckland central' chart will be drawn here.
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Rolling 3mth average - $ per week
Source: MBIE
The 'Rodney' chart will be drawn here.
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Rolling 3mth average - $ per week
Source: MBIE
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Rolling 3mth average - $ per week
Source: MBIE
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Rolling 3mth average - $ per week
Source: MBIE
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Rolling 3mth average - $ per week
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Rolling 3mth average - $ per week
Source: MBIE
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Rolling 3mth average - $/wk
Source: MBIE

Average weekly rents - North Island districts

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Rolling 3mth average - $ per week
Source: MBIE
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Rolling 3mth average - $ per week
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Rolling 3mth average - $ per week
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Rolling 3mth average - $ per week
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Rolling 3mth average - $ per week
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Rolling 3mth average - $ per week
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Rolling 3mth average - $/wk
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Source: MBIE
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Source: MBIE
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Source: MBIE
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Source: MBIE
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Source: MBIE
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Source: MBIE
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Source: MBIE

Average weekly rents - South Island districts

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The 'Christchurch' chart will be drawn here.
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Rolling 3mth average - $ per week
Source: MBIE
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Rolling 3mth average - $ per week
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Rolling 3mth average - $ per week
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Rolling 3mth average - $ per week
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Rolling 3mth average - $ per week
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Rolling 3mth average - $ per week
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Rolling 3mth average - $/wk
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39 Comments

30
up

So rent up 6%. Are we hitting our 2% inflation target for people who rent and spend approx 50% of their pay on that (rent) consumption item?

Isn't that about 30% of our population? So 1/3 of the population are experiencing inflation much higher than the 2% inflation target the RBNZ is mandated to maintain - or do they only need to worry about price inflation for those who own property? It would appear every move is there to support property owners. One wonders how long that paradigm is sustainable for.

20
up

All the RBNZ's efforts go into maintaining the lifestyles of the few lucky enough to be on the ladder. If you have not yet reached the first rung of the ladder..... you are dispensable cannon fodder.

17
up

I just seems strange that the main cost for a landlord is interest payments, and that cost has been reducing significantly as interest rates fall for the last (how many years/decades) - so why are rents still going up?

Hopefully they're all making hay.....because what are they going to do when interest rates turn and their costs are actually going up...not down. You may find they've already sucked the blood out of the tenant/serf stone. Please pay more rent serf....'I can't because I'm now paying more for my groceries, power, petrol and clothing'.

12
up

1. Because the absolute frenzy of speculation over the last year has resulted in new landlords charging high rents to cover the astronomical mortgages they've taken out.

2. Many renters are trapped because the barrier to entry for ownership is so high (due to 1.) that other landlords can increase to 'market rates' when tenancies come up.

I'm not sure we've quite hit the end of ability to pay but I agree, there has to be a point somewhere. How many more people can skip meals, leave the heater off, wear the rags a bit longer, crowd into places etc to make sure the rent gets paid? Possibly some aren't completely tapped out.

Covid has been a boon for landlords. The team of 5M has paid in and done their bit, and the landlords benefit from a captured market stuck here in the covid free isles.

Many landlords elected to take losses and cut deals on rent to help their tenants, there are a lot of well meaning land lords out there. Many of them do not charge market rent for the long term tenants they have. Most land lords did not ask for the capital gains, nor have they sold in to those gains, they bought expecting reasonable returns over very long periods of time, they are in the business of been land lords. What seems to annoy people most is that they can do maths and buy property when it makes reasonable business sense to do so. That they understand you can take initial cash flow losses and yet make cash flow profit long term. That they will buy even when 'its a bubble' because they do not time the market and are not scared of taking capital losses.

I think your wrong IO. Rents will now skyrocket as renters have no choice. House prices are through the roof and getting that deposit together is now almost impossible. Renters will have no choice but to cut back on other expenses. My only question is when is this all going to go very badly ? The number of renters is going to rise sharply in the coming years so its going to be one big ugly pissed off mob.

Well if renters stop spending in the real economy and that's about 30% of the NZ population, then that means lower incomes and profits for businesses, which means limited wage increases, if any wage increases at all. All while costs are rising.

Ever heard of Australia?

Most government MPs, councillors, and senior policymakers at local and central departments are themselves up multiple rungs of the ladder.

Why would they have the best interest of the have-nots in their minds?

So 2/3 of the population don't rent so have 0% rental inflation. 6%/3 = 2% CPI. Seems right.

Job done RBNZ.

11
up

So just inflation for those without. Seems right.

12
up

So you have no care for the plight of your customers? (your tenants).

What a strange business model that landlords run - seems more aligned to slavery and abuse, than a business with social responsibility.

I wish I could be this ignorant to the plight of other people.

Surging council rates, waste collection charges, insurance premiums, maintenance bills, etc. make up a significant portion of rental inflation and are hitting homeowners as well.

Not 6% but housing-cost inflation is definitely not zero.

So what you are saying is if the price of renting went up so high that nobody could afford it and all renters became homeless we can just chalk that up as none of the population rent = 0% rental inflation CPI. Genius! Wait... so once hyperinflation really kicks in and the price of everything is so high that nobody can afford to buy anything then inflation will actually be 0% CPI?? Quick give the RBNZ a call you have solved the inflation problem!

Job done HeavyG.

Great comment. Grossing up the rent payment requires (at a minimum) $30k of your typical tenants income to be diverted to their landlord. Shocking. If this trend continues for just a few more years, surely we will see a total breakdown in the social contract, or will the Govt ride to the rescue with increased accommodation supplements?

I am picking you are right about an increase in accommodation supplements or benefits,pointless without a rent freeze otherwise just another landlord subsidy.

The breakdown in the social contract is well underway. A large number of people at the bottom have given up completely, and the otherwise-middle-class under-40s are (rightly) have seen that a tax on capital gains on investment property is 'unthinkable' while tens of thousands of families stuffed into motel rooms paid for by the Government is not. We lost the plot some time ago.

14
up

Rent may have gone up but it was offset by the price of triangular shaped inflatable knitting needles going down. So there is no inflation. Move along. Nothing to see here.

Highly sceptical of rent inflation figures personally know of tenants in small waikato town who in the last 2 years had their rents go from around $150.00/week to around $300.00/week now Also a lower north island city where tenants went through Similar rise in about 12 months so how do they get such modest rent inflation figures I understand averaging but struggle to believe these cases are exceptions

10
up

Data is only recorded when a rental deposit is first filed. If rents go up in the course of a tenancy that isn't recaptured in government data. Your friend is still officially paying $150/w as far as government know.

That's why I laughed a bit at talk of rent control by the government. They don't actually even capture the data so they have no chance of managing the situation capably.

It's certainly been a bumper year thanks to Prime Minister Ardern and Guv' Orr. Costs associated with finance down, asset prices and rents up. The perfect conditions for property investment.

Ideally we'd like to see very restrained spending on infrastructure this year just to keep inflation within RBNZs target range so rates stay low, maybe try the old "no shovel ready projects" excuse. Public sector wage freezes where a promising start.

More accommodation supplement top ups...... courtesy of the taxpayer, when will this madness end ?

What you expect? this government hates landlords, over the years, has added extra costs to landlords, NOW this biggest problem, cannot claim the interest on rental loans, any other business can. The rents are going to up even more, due to this. The landlords have to get these costs BACK, they CANNOT absorb this. Also the government hopes many landlords will sell and leave the market.
If this happens, there will be LESS rentals, supply and demand, less rentals, the cost of rent will go up further. Did the government think this? they are wishing many will SELL.
Property investors are not like the government, they will look at the overall picture and many will NOT sell, and the governments plan will back fire on them. Many politicians in this Labour government do NOT own investment properties, they have NO understanding of the housing market at all, how can they?

New builds, there are few risks with that, you can still claim the interest on loans, we will see after the next election, if the Labour if they win, still stop this as well, if it does not go their way. Time will tell

But rents and capital values are up significantly - how does this government hate landlords? Many that I talk to, love labour. Perhaps even more so than National now.

@ ddporter .......it's called "business' and nothing ever stays the same forever, especially when central banks keep the printing presses going "bbrrrrrrrrr", as something must happen eventually because of it, while it all has to be PAID BACK to someone.

On what could happen, inflation comes to mind, which as you know the figures (on the low side) are completely "doctored" around the world.. ...have a think about that and remember there is nothing I know of in the next 10 years ie shares, property, bitcoin etc, that is going to be completely "bullet proof".

As a "business" what are you "producing" for the economy that you can sell, that can increase our productivity ? .....that cold, damp, dump on the southern slopes of Mt Roskill just doesn't "cut the mustard" world wide.

You do realise there is only so much tenants will take with rent increases ......their incomes are not going up as fast as your rents.

So ddporter what is your "true" business model ?

13
up

Landlords in their current form need to be driven from the housing market. They're effectively holding the government and the country to ransom with rent increases every time anyone proposes that maybe people shouldn't be paying half their income for a cold, damp shack that isn't maintained. I don't see how people buying up existing houses, driving up prices and forcing people to stay in the insecurity of renting in NZ has any benefit whatsoever, apart from to their personal fortunes. It's an exploitative cartel, plain and simple.

Again this ridiculous assumption that all renters would be homeowners “if only”

There are only a fraction of renters that will ever be able to be a FHB the rest need rental accom and if private landlords don’t provide it guess who has to

I didn't say everyone would/should be a homeowner, I said many renters effectively don't have a choice because speculation has forced prices up at such incredible speed. You're not fooling anyone here implying you're doing the government's job housing people, you're clipping the ticket for personal gain, that's it. Personally, I would prefer the government leaning into providing more housing - we had a much higher ownership rate when it did.

Again this ridiculous assumption that all renters remain renters “if only”.

"There are only a fraction of renters that will ever be able to be a FHB" - correct. 1/1 is a fraction.

The rate of home ownership is constantly changing. The fact it isn't fixed implies all renters would be homeowners “if only”. As freedom loving free market capitalists shouldn't we want all renters to be homeowners "if only"?

"There are only a fraction of renters that will ever be able to be a FHB the rest need rental accom and if private landlords don’t provide it guess who has to"

Alright Emperor Palpatine. It sounds like you want NZ to be a nation where tyrannical feudal landlords who repress the poor and only allow a small select "fraction" or renters to be elevated from serfdom?

10
up

It’s IMPOSSIBLY HARD to be a landlord... yet they’ll NEVER SELL. Which is it? Your argument is completely incoherent. And don’t worry, if you sell up the house won’t disappear, someone still gets to live in it.

Higher rents = mostly more payments to the bankers. So much cash being sucked out by these thieves.

We have turned into a Jelly Fish nation.

IE no central nervous system (read: no one really in charge and no effective leadership), but in spite of this, a whole lot of individual cells (people) somehow come together as a system (present status quo), either operating at a national level completely unaware or with no feeling, to those other cells around them.

Fun Fact: A Jelly Fish's mouth is also its arse - which somehow also seems a good metaphor for this Govt.

Landlords still absorbing the bulk of Jacindas new regulatory costs. Can’t see that going on much longer.

If you’ve owned a property for a few years then the easing of interest rates is indeed a windfall. However for more recent investments, the cost of a property, even with low interest rates necessitates higher rents. That tends to set the upward market trend for rents. Greed is at play for some but if a 3 bed house in Papakura costs 700k then 420k mortgage, rates, waste water, maintenance budget, and compliance overheads obviate higher revenues to service. If you bought it 5 years ago fo 500k it’s a different ball game.

Landlords are no where near increasing rents enough to cover Jacinda’s new regulatory standards being imposed. Not yet anyway.

Landlords are no where near increasing rents enough to cover Jacinda’s new regulatory standards being imposed. Not yet anyway.