The average residential rent for newly tenanted properties throughout New Zealand increased by $43 a week last year.
That puts the average rent for properties newly tenanted in the fourth quarter of 2021 at $527 a week, up 9.0% from $483 in the fourth quarter of 2020. (The dollar change figures may not exactly match the difference between the quarterly rent figures quoted due to the rounding of cents in the numbers. The difference should be no more than $1).
The biggest increase in average rent last year in both dollar and percentage terms was in Queenstown-Lakes District, where it increased by $122 a week (24.3%).
Dunedin was the only place to record an annual decrease in average rent last year, dropping $3 a week (-0.8%) from $435 in the fourth quarter of 2020 to $432 in the fourth quarter of 2021.
Auckland's North Shore retains its position as the most expensive place to rent a home with an average rent of $642 a week, up by $33 a week (5.5%).
Invercargill remains the least expensive place to rent at with an average of $373, up by $33 a week (9.8%).
The table below shows average rents in the fourth quarter of last year for all 31 cities and districts measured by interest.co.nz and shows how much they have changed over the previous 12 months.
Although rent increases have generally been high, with 19 of the 31 districts recording double digit percentage increases last year, most of the growth occurred at the end of the year, after an extended period of little or no rent growth for most places.
The summer months are usually the busiest time of year for the rental market and there may also have been a build up of pressure for some upward movement in rents as Covid-related restrictions eased late last year.
However even if the the rate at which rents increased late last year does not continue into the first quarter of this year, the size of the increases that have occurred so far and the fact they are coming on top of higher prices generally, will be contributing to the rising pressure on many household budgets.
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93 Comments
Interest rates are increasing, leads to higher rents?
Most landlords are disgusting parasites.
They have overpaid for rental houses for years now. Ignoring all risk in their pursuit of overleveraged, unearned "wealth".
And when shtf, the first thing they do is to try to squeeze more money out of their tenants.
A scourge on society.
Here’s a point. If National get back in and get rid of interest deductibility… will that extra money be discounted off rents? This is the reason the slumlords have given for the recent increase right?
Bit like how landlords biggest expense (interest rates costs) have been dropping for the last 30 years as interest rates were falling and yet the reduce costs weren't shared with the customers (tenants).
So oddly you increase rents when business costs fall, and then increase rents again when business costs rise. Sounds more like a scam/rort than a legitimate business to me.
Building equity at a faster rate as interest rates fall actually increases the (rental) business cost as they are now able to leverage further into more properties.
Labour wants to solve the housing crisis with welfare and direct intervention; National would rather it grows to enrich their voter base.
As a result, there is little policy support for large-scale build-to-rent projects that can help make affordable quality rental becoming commonplace in our population centres.
https://www.stuff.co.nz/business/127800528/simplicity-kiwisaver-to-buil…
My sister recently moved across the ditch to Melbourne into a long-stay serviced apartment that costs $240/week. The website indicates its run on a build-to-rent model, so rents remain fairly stable for those looking to stay long-term.
National also uses welfare and direct intervention to benefit their voter base. It was National who enabled the raiding of retirement savings to increase what young people could afford to pay to older voters, and they also increased taxpayer subsidies and grants for rents and prices.
As a long-term renter, my plea is that landlords at least maintain their rental properties to a reasonable standard.
TTP
We kept our rents unchanged for 6 years until the interest deduction change.
All our tenants have been very understanding and it was very sad and hard conversation to have.
Would you drop the rent back to what it was if interest deductibility is reinstated by National?
You already know the answer to that one.
-
“Would you drop the rent back to what it was if interest deductibility is reinstated by National?”
Depends, but less likely. Maybe if everything else drops, maintenance, rates, benefits, wages, petrol, takeaways meals…etc.
But wouldn’t need to increase it for a good few years and have those awkward conversations….
For now rent is reviewed annually thanks to Labour.
"Reviewed" = Increased.
Shifting the blame to govt, as as tradition.
“"Reviewed" = Increased.
Shifting the blame to govt, as as tradition.“
Correct.
Everybody is blaming somebody thats just human nature.
You do not need to justify charging a market rent. It sounds like you, as like many landlords, allow tenants to pay a below market rent when times are good e.g. interest rates are low. If expenses increase why should a landlord who has been generous in the past by charging a below market rent now be abused for seeking to charge a market rent. Some crazy logic by the envy brigade. The market sets the maximum rent not the expenses incurred by the landlord, a truth that the envy brigade seem all to happy to shout when dreaming of a property crash but forget when landlords start increasing rents in response to increasing costs.
I do hope they take your plea on board
I'm sure if you were a landlord you would be absolutely saintly and keep your rent 50% below the market.
Has it not occurred to you that landlords have had to pass on massive increase in costs due to the moronic policies of this government?
But primarily because they're there to make money, of course. Like when student allowances were increased and suddenly Wellington's salt of the earth landlords gobbled it up. They're not sending their best...
My landlords are really nice and I'm grateful for their hands off approach.
If you can find decent, private landlords will little to no mortgage - you're on to a winner I reckon!
I flick through an extra $10 a week, I imagine my rent would be much higher If they had a mortgage.
Fitzgerald,
fair enough. Would you support rent controls? Say, no increase beyond the inflation rate? I have one property which I have owned for 21 years with the same tenant for the past 12 years. I am happy to charge under the going market rate for such a good tenant.
I would be fine with some form of rent control.
Higher house prices = Higher rents, no idea why people cannot make the connection. Despite the moaning and groaning from those that rent that they cannot pay more, you know they can pay more.
" the moaning and groaning from those that rent "
These words say a lot about you. Every "moaning and groaning" tenant is someone who's struggling to make ends meet while working full time. You squeezing them for more is despite not providing a better service is just cruel. You know that yet you still do it.
.
If the cereal packet size and content shrink yet the price stays the same would you say that is ok... or do you tell the supermarket staff and owner what you just said CJ
You squeezing them for more is despite not providing a better service is just cruel. You know that yet you still do it.
Will the supermarket staff tell me to "Stop moaning and groaning, we know you can afford to buy your groceries"
My logic still stands. Companies that make cereal bars can be just as predatory as some landlords. But they at least stay quiet about it.
Not really correct. Consumers can always trade down on cereal bars or they can forgo consumption.
I wonder if you give regularly to charity as many low and moderate income people do. It is part of being a responsible citizen who is grateful that life has gone well for you. Please think about it
I am so glad Im not your tenant
Higher house prices are not linked to higher rents. Higher rents are linked to higher incomes, because landlords extract as much rent as they can on aggregate. Individual landlords who don't extract as much as possible don't prevent the general case from being true: landlords increase rent when tenants have more income, as long as supply of housing is constrained.
You can see this in the CoreLogic housing affordability report. Look at rent-to-income ratios in Auckland over the last few decades, it sits pretty solidly at 20% +/- 1%.
Interesting so renters think that only 20% of their income should go on rent ? Kind of strange when I was paying over 50% of my income on a mortgage.
Flatmates?!
three flatmates pay 20% each??
Um, isn't that still 20% of household income?
Without the flatmates it would be 60% of a single wage earners pay. I assume rent to income works on average rent against average income, not average rent against average household income.
Why is the percentage of your income you spent on a mortgage relevant to what percentage of income should be spent on rent? You were purchasing an asset that generally appreciates in value. Renters are not. Also, 'paying over 50% of income on mortgage' is generally considered a very bad idea, unless the the reason you are doing so is because you are deliberately overpaying to get debt free sooner. So again, not clear why it's relevant to what renters should pay or expect to pay.
The numbers are gross average household income and average rent; renters tend to be lower income than the average, so the typical renter is spending a higher percentage of their income.
For example, in 2020:
Renters were more than twice as likely as homeowners to spend 40 percent or more of their household income on housing costs. Just over 1 in 4 (27.1 percent) renting households spent 40 percent or more of their household income on rent and other housing costs. In contrast, about 1 in 9 (11.6 percent) of people who owned, or partly owned, their own home spent 40 percent or more of their household income on housing costs.
This is true in a deflationary environment with falling interest rates - like the last 40 years.
Might not be true in the next 40 years.
House prices might fall but rents may go up - so the opposite of the relationship you believe in.
This is a march to neo-feudalism. Now that all the financial instability is coming to the gore, the generals are rethinking how to keep moving forward.
Which will undo much of the hard work of post-war generations and their governments. The self-absorbed greed of those who were left affordable housing by their forebears is so destructive to New Zealand society.
Despite the moaning and groaning from those that rent that they cannot pay more, you know they can pay more.
Imagine being such an irredeemable sociopath to say that out loud in a country that has the highest levels of homelessness and rental affordability stress in the OECD.
Sure you might be able to squeeze a bit more out of your tenants and they might be able to afford it .... if they stop giving their kids 3 meals a day. Perhaps if they forgo dental work and let their teeth rot. Or more likely if they are just forced out of the rental market and end up living in a garage or a car.
Just another boomer who thinks future generations do not deserve the same opportunities they had, all so they can have a slightly cushier retirement, while locking future generations into poverty.
Carlos 67,
Unless you are being ironic, you truly are revolting.
Labour government are responsible for crazy house prices and now crazy rent prices.
You cant argue with the numbers since they took over.
Their interfering policies are adding costs to every factor of the NZ economy and NZ socieity.
Congratulations to those who voted for them.
But dont worry, we can just borrow and spend out way out of it.
Some landlords have little or even no debt. Interest rate movements aren’t applicable to them. But other opex has been rising too. Council rates, insurance, and others are also contributing to rising rents.
But inflation was only half that last year. Surely something doesn't add.
Its primarily because the preceding year had a rent freeze, so its effectively 2 years of rent increases.
Another sign that central bank policies are screwing one class of people at the advantage of another.
As Dalio points out in his recent book 'Changing World Order', this unless rectified by political means, usually results in financial and social disorder and potential for a breakdown of the social contract and possible civil war or revolution.
High time central bankers and governments do the right thing and restore balance back towards all people - not just towards asset owners at the expense of non-asset owners.
Well said. We recently had a conversation with a friend who is a long-time landlord. We were talking about income inequality and his comment was that those who work in the likes of Countdown are just lazy and havent bothered to improve their situation. My wife and I were so shocked that someone we have known for some years had this kind of attitude. He was born into a well-to-do family and has worked hard to become a multi-millionaire, but seems to have no appreciation of how difficult it is to live on the minimum wage. It is just not possible for everyone who wants to, to go into tertiary training. Some are just not up to it for many reasons, but does that make them a lesser-valued person, or even worse, deserve the title "lazy?" Having close family members reliant on the welfare system for many years, for mainly health reasons or family situations etc, makes me realise that the attitudes of those who have enjoyed a steady life with steady incomes need to be a little more sympathetic and less judgemental.
Thing is, the "free money from houses" scheme also serves to undermine any regard for wealth earned through accomplishment. He may have worked very hard to become a multi-millionaire - e.g. through building a great business - but more and more will simply assume he received free money from houses for merely being born at the right time and hasn't achieved much of consequence.
All adding to CPI. We need to get those non-tradable numbers down now, including rent, to control inflation this year.
Looks like we have a bit of a squeeze occurring on those in the lower socio-economic classes.
Wonder if this will result in a surge in negitive social effects in our society over the next year or two. Don't worry though i'm sure any such effects will be considered imported by our most gracious leader.
I'm surprised that on a business site such as Interest, who's motto is "Helping you make financial decisions", there are so many poor (read finanically uneducated), bitter, renting commenters.
Whereas this comment of yours "helps you make financial decisions"...
How many times have you commented just to whine about whiners? You've been doing this for years. You also announced you "quitting" once because of it. Yet you're here again, whining.
Also, why would anyone take financial advice from random commenters?
"poor (read financially uneducated)" - Wow. I can't even...........
Poor, could be finanically uneducated or just financially undisciplined or maybe both, or maybe lazy, anyway with little money, struggling and most definitely in no position to give advice to others about finance. (finance is another word for money CJ)
1. Your assumptions about what leads to poverty are incorrect. Incomplete and prejudiced at best.
2. What makes you think poor people are giving financial advice here?
3. No need for belittling comments. Especially since you don't seem to know what the word poor means. Or financial advice, for that matter.
Haha, all good, I just thought I'd level things up a bit for the never ending "rich bashing" but sure, rich bashing is fine, the reverse is very bad taste... Sorry you felt personally attacked by my post
So you thought you'd engage in some poor bashing then?
Yes, not good huh? Rich bashing = good, poor bashing = bad
Don't you think it's pretty "poor" form to poor bash when you've mentioned on here that you and your wife often help out the poor and needy?
Maybe you do it just for moral grandstanding?
The big difference is that when we feed the homeless, they don't call us names, they say thanks
If we give alms but don't stand for better opportunities for the poorer in our society, for whose sake are we ultimately doing it?
Serious question. I used to work in poverty alleviation in pretty dire circumstances. We witnessed a religious schism over this very issue, but it was also cause for a lot of introspection on our own parts (something I still think on).
In New Zealand we once strengthened rights and opportunities for the poorest, and used policy such as land tax to break up land banks and enable many more Kiwis to gain land, capital and grow strong middle classes. As we've begun to undo this and transfer wealth upwards instead, it behooves us to consider whether crumbs from our table and the giving of alms is truly for the poor or for our own satisfaction.
Hard to have the oh-so-desired "intelligent discussion" when you don't even reply to my questions. Rich bashing? Where?
Here:
by Fitzgerald | 10th Mar 22, 9:06am
Most landlords are disgusting parasites.
They have overpaid for rental houses for years now. Ignoring all risk in their pursuit of overleveraged, unearned "wealth".
And when shtf, the first thing they do is to try to squeeze more money out of their tenants.
A scourge on society.
Happy now?
Again, incorrect assumptions from your part. First of all, he isn't talking about rich people. He is talking about "most landlords".
Second, many landlords aren't rich.
Third, you still haven't answered my other questions in the previous comments. But that's OK, I can live with it.
Incorrect CJ,
Firstly
Secondly
Thirdly
and forthly… if you waste less time writing rubbish and do more instead, you might be richer too
I don't need financial advice from you, thanks. Since you sold your investment property right before the 30% bump
Guess who's got more money?
How does that even matter? Guess what, Kim Kardashian has a net worth of 1.8 billion USD. I'm sure she'd give *AMAZING* financial advice.
Here, take the jester's hat Yvil. You worked hard for it. You deserve it.
I knew you would end up taking your hat off to me
Also I didn't sell an investment house in 2020, I sold my own Ponsonby house and guess what? I then bought another better one
“if you waste less time writing rubbish and do more instead, you might be richer too”
This is why we have different people doing different things and making different choices, positive and negative make things work.
And you thought the solution to that was NOT to tell that commenter to cut it out, or call them out on it, but instead to engage in what you yourself have just agreed was poor bashing.
Yes!
Think you might need to take another break from commenting, Yvil.
That's not "rich bashing", it's criticising landlords for their parasitic nature in particular.
I don't see anyone here bashing folk who are out there creating a fortune by building a business. Most people admire entrepreneurs who are building great Kiwi businesses and benefiting from their achievements.
Seems an emotional overreaction, at the least.
Surely landlords should look first to their own behaviour if they're worried about how people view them, rather than always seeking to blame others.
"it's criticising landlords for their parasitic nature"
There you go, perfect example of putting down landlords, yet, somehow, you think it's perfectly fine...
Where did I make a value judgment on that statement, rather than simply correcting your erroneous identification of "rich bashing"? Feel free to point it out.
Point stands, it's no good landlords being on here always seeking to whine and blame others for their bad reputation. They just need to get out there and make a success of their reputation by behaving well. They're in control of their own behaviour.
Top bants lads, quality humour.
I think the problem is that its difficult to tell who is swimming naked because the central bank keeps giving the naked free clothing each time the tide goes out. Perhaps if everyone could dress themselves it would make it a bit clearer as to who was financially educated and who is not when the tide goes out. At present it is very difficult to tell as the central bank keeps ripping the clothes from those who have them and giving them to the naked (those with too much debt).
This!
I rent. I am neither poor, nor bitter.
A financially literate renter? Yes, that is how I would describe myself. I could afford a house, but choose to invest elsewhere because NZ houses are a terrible investment.
This constant degrading of renters - This widespread, openly spoken view that renters are stupid, or financially illiterate, or lazy or bitter - This is the hardest thing about renting. I encounter this attitude constantly, from real estate agents, landlord agents, landlords, and from twats like Yvil.
It is really sad to see how our supposedly egalitarian society has degraded. Comments like Yvil's are all about an ego stroke for property owners, at the expense of the ~37% of Kiwis who rent. I can't wait for the property market to crash and burn. Maybe some more humble and less narcissistic landlords will arise from the ashes.
Houses are not an investment, they are a lifestyle choice and renting long term sucks end of story. It just so happens that many have got rich on the back of housing, that is just the way it is and anyone is free to get on the bandwagon if they want to as long as they want to take the risk.
There's risk? I thought the central bank just cuts interest rates and removes safeguards like LVR's if prices might fall (sarc).
What make's it stranger is that renters are the business customers of landlords.
Yet landlords come onto sites like this to abuse their customers and tell them how stupid/unintelligent they are...losers, doom gloom merchants, lazy, living off the government via accommodation supplements etc.
It's the weirdest business model you can think of - apparently with the lowest form of code of conduct/ethics/morals/social responsibility.
Fully agree with you IO, landlords need renters and renters need landlords, employees need employers and employers need employees yet there is sooo much hate between these groups… I was a a renter, a landlord, an employee and now an employer, I have always treated the other party with respect. What one does or what one has doesn't define the person.
It's interesting though that the continuous, daily anti landlord abuse on Interest doesn't get frowned upon, it's not even noticed anymore, it's considered normal, yet if I play the devil's advocate's and post the opposite, the response is to be very offended. I thought you would have seen my post for what it is IO.
How about you take some personal responsibility, Yvil. You said a really nasty thing. You can try to justify it all you like by saying that you were paying devil's advocate, trying to level the playing field, that you were sick of landlord bashing, whatever - you still said a really nasty thing about poor people. And the problem is not that some people were offended by that, the problem is that it was a really nasty thing to say.
" yet if I play the devil's advocate's and post the opposite, the response is to be very offended"
Maybe because they were right, and you were wrong.
Haha unbelievable comment, I think you're actually serious about it too:
"landlord bashing is right, tenant bashing is wrong"
I don't think I could have come up with a better example to show how one sided these nasty opinions are.
I can see where you are coming from. Sometimes sentiment within a society changes. We've gone from 'greed is good', 'winning is best' to more awareness that 'hey actually greed might not be so good' and 'perhaps we should even the playing field so everyone gets a fair chance'.
When this cycle goes through and the dust settles, 'greed is good' will be back in fashion no doubt. But for now, far more of society have become aware of the risk now that is happening to the entire financial system because of the greed of the last decade (or more...). And many property investor/landlords are guilty of that (rightly or wrongly). They have done very well thanks to the policies enacted by governments and central banks. Was this fair to younger generations?
In the past most people have been impartial to it all as they couldn't see the damage being done to society. Now I think the majority of society can see the damage. So if one wants to gloat about how well they are doing at the expense of the future of other people (perhaps other peoples children for example), then you've got to be ready for what comes your way. You can't have your cake and eat it too.
That's a very good and very sensitive post IO. I have to admit that I missed the shift from "do the best you can for your family" to "look out for everyone else first". (I'm also unconvinced I truly believe this as being the best way forward)
It isn't black and white though - its the balance of what you do for yourself/your own family with an awareness of how that might impact the well-being of society as a whole. If as a wealthy landlord you outbid a bunch of young FHB's at auctions (the last 5-10 years) there's a strong possibility that those people will rightly feel resentfulness towards you. That's simply human nature.
If you want to act with greed and it has a negative impact on others, then you should expect they will not like you for that reason.
Continue to do the best you can for your family but question the morality/ethical nature of property investment (or any other action) when its damaging the hope of young people (or anyone in society) to have a meaningful and properous life in this country because they can't afford the deposit anymore and are stuck renting, putting off getting married and having children (for example).
Compassion where it is merited. Watch how quickly people will stop attacking and start respecting.
Good point. Likewise a lobbyists or politicians who use their influence to set things up to effectively transfer wealth from those with wages and savings to those - including themselves - who better timing and opportunity were able to acquire land earlier. They may be primarily motivated by a desire to look after oneself and one's family, but it comes at a pretty high and terrible cost to many others in society.
They may also want - out of the desire to look after oneself and one's own family - for those others already negatively affected folk in society to pay almost all the taxes to fund social services and a universal benefit for their old age, but inevitably along the way we will face questions in society of reciprocity, fairness and justice.
Fitzgerald, my comments are upsetting huh? I see you're very new here (2 weeks). You seem to not understand I made these comments because I'm sooo tired of the constant landlord or slumlord or many worse names bashing by so many on Interest. So many call landlords parasites and many other names, not just on the thread today but over many years. These same people also hate, A Orr, Jacinda, John Key, Real Estate agents, banks, foreigners, mornings, evenings, left right up and down, you name it, they just come down to tear down anyone who is doing well.
My real view is very different from my post above, I was just really fed up, my view is that what you do or have, doesn't define you as a person
Don't forget the motelier parasites while you're at it.
Bleedin obvious: living costs rising much faster than incomes = recession
Meanwhile Robertson blather about how good the economy is.
As for housing market, not bothered saying much for 2 months as too busy.
However, plainly it is slowing and above is a prime cause. Disposable income is prime driver of GDP
It is falling and inflation continues to rise as rates and rents rise
The risk to FHB was obvious too, but the cheer leaders on here never cared about it
The whole market price 40% drive up has been driven by ludicrous rates and holidays from payments in la la land and not just in NZ. The party is over and rates have no where to go but up. Of course NZ house prices can never go down.
Putin was just more fuel on the fire.
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