Residential rents tended to settle in the fourth quarter of last year, after rising relatively strongly in the first three quarters of 2023.
According to the latest data from the Ministry of Business Innovation and Employment's Bond Centre, the national median weekly rent, for all housing types based on bonds received, was $580 a week in the third quarter (Q3) of 2023, unchanged from the previous quarter. However, it was up $30 a week (5.2%) compared to Q4 2022.
Interest.co.nz tracks median rents for one and two bedroom apartments/units and three bedroom houses in all of the main urban districts. Across the entire country the biggest increase in median rents last year was for two bedroom apartments/units. They rose from $530 a week in Q4 2022 to $588 in Q4 2023, up by $58 (10.9%) for the year. The median rent for one bedroom apartments/units increased by $40 a week (9.8%), and median rents for three bedroom houses increased by $35 a week (5.8%) over the same period. (See graph below).
Around the country, the biggest increases in median rents last year (for all property types) occurred in Queenstown-Lakes and Whakatane, both of which were up by $75 a week, followed by New Plymouth and Taupo, both up $70, Hastings and Ashburton up $60 and Auckland up $55.
At the other end of the scale, the median rent in Wellington City was unchanged at the end of last year compared to the end of 2022, while the lowest annual increases were in Dunedin +$10, Nelson +$15, Palmerston North +$18, and Selwyn, Christchurch and Lower Hutt, all up $20 a week.
Within the Auckland Region, median rents in eight council ward areas (refer to ward map below) showed no increase in median rents in Q4 2023 compared to Q3 2023.These were Albany, Waitakere, Waitemata & Gulf, Albert-Eden-Roskill, Howick, Manukau, Manurewa-Papakura and Franklin, while three wards - Rodney, North Shore and Whau, posted quarterly declines.
That left Orakei and Maungakiekie-Tamaki as the only Auckland wards where median rents increased in Q4 compared to Q3 last year.
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Auckland Council Ward Areas
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27 Comments
national median weekly rent, for all housing types based on bonds received, was $580 a week in the third quarter (Q3) of 2023
Requiring a $100,000pa household income to be considered affordable rent (at the 'aggressive end' of rent affordability);
https://calculate.co.nz/rent-affordability-calculator.php
A circuit breaker is most certainly needed;
https://www.interest.co.nz/property/119377/katharine-moody-takes-look-r…
Isn't that slightly above two minimum wage jobs though? Also only about $80pw above the per person charge in some Uni halls of residence.
Yes, but don't forget that we have many single income households in NZ; many superannuitants with no other income; as well as many two-income households with children that will have the added burden of childcare.
That's why the Accommodation Supplement paid out is well over $2,000,000,000 per annum.
It's a massive expense/drain on our government books.
The supplement is an amazing amount of landlord welfare benefit going out per annum. Thank goodness we've given them a tax cut too to help restore their dignity.
The alternative is the government provide the houses.
The government spends 2 billion a year just managing state houses. Then you have to acquire a house, maintain it, pay rates (and maybe insurance).
Sadly, the supplement is much better value for money.
The alternative is government regulating the market.
As is evidenced by the ever growing wait list for social housing.
They need ever more houses, for sure.
Ultimately there's a cost. I'm not sure how regulation overcomes that. Might make it cheaper to source new houses, depending on what they did.
There is still a place for KO/HNZ as long as we have drop kicks looking for accom
Seems I earn too much to qualify for the supplement, so my tax goes to paying for others to receive it. I rent but have to pay the full rent myself, how sick is that
And, many of these houses have free gardening. You have to pay for yours out of pocket, or do it yourself in your own time.
It's a super nice idea, but also not an amazing precedent.
Well, yes, subsidising the creation of more supply rather than higher rents to exisiting asset owners would make far more sense. As was done in post-war decades, supply that today's older generations benefitted from in the form of affordable housing.
We shouldn't be handing out welfare to the wealthy in a way that incentivise and rewards speculation on exisiting stock, that's absurd. Next thing you know all the MPs will be speculating on exisiting housing!
Well, yes, subsidising the creation of more supply rather than higher rents to exisiting asset owners would make far more sense
Just the dwellings alone would cost 3x-4x as much annually to the state/taxpayer - someone's paying the subsidy. Then you'd have to also cover rates, insurance, maintenance and management of what is a depreciating asset. So probably closer to 5x as much.
And at the rate we can build these, it would take 43 years to supply enough for 2024 levels of requirement.
How would that make more sense? How would this additional expense be funded? And are you also against subsidizing the food industry by giving people in need money for food?
Given rent is the first expense one must pay, in a round about way a food grant just enables rents to be higher.
A food grant is not to subsidize the food industry, but to compensate for the fact that rent is too high and there's not enough left for people to eat.
I think you mean deregulating the market. Regulation is what has caused the shortage in rental housing in the first place, reducing supply, which increases rents. More regulation will simply result in even lower supply, and even higher rents.
The argument is that the rental market is "free", and the supplement influences the market much more than the face value of $2b. If all accom supplement was for rentals, it would account for $100 per rental per week. If it were half of all rentals, $200 per rental per week. So how much of the average cost of rentals has been influenced by this supplement?
Pumping an asset and population bubble in the face of housing woes while compensating with a benefit which costs renters much more than the value given, that's big mistake.
I would rather the government creating jobs by spending on workers to maintain our housing stock than a supplement which is paying interest on a loan backed by a derelict house.
Not a tax cut but ability to deduct interest payments. Note the Tax Working Group advised against Labour stopping the deductibility. Details matter
I think the new government is reversing that (i.e., they will be restoring normal business tax rules for residential rental accommodation providers).
Yes, its funny how I can borrow against my house to buy shares in a property company, then tax deduct the interest bill against the dividend payments. My actions in buying property company shares adds no discernible value to the economy (other than allowing a fellow investor to cash up), but the idea of buying a second house for a needy family to live in is considered so offensive that tax deductions should be disallowed, while tens of thousands of families are homeless and waiting for the Govt to build them a house to live in. Yes, its a funny world indeed.
"the idea of buying a second house for a needy family to live in is considered so offensive that tax deductions should be disallowed, while tens of thousands of families are homeless"
Non owner occupiers owners of existing real estate are motivated by profit - recently the key incentive has been mainly tax free capital gains.
Any government policy that adversely impacts profitability also adversely impacts their vested financial self interests. Those with vested financial self interests will have their justifications, and narrative for maintaining the status quo.
Here's another perspective.
The previous government policies levelled the playing field between owner occupier buyers and non owner occupier buyers in the existing house market.
Previously owner occupier buyers were at a huge disadvantage to non owner occupier buyers, and as a result, non owner occupier buyers were outbidding owner occupier buyers. There were non owner occupier buyer buying syndicates which resulted in an even larger ability to outbid owner occupier buyers.
Regardless of those policy changes, many non owner occupier buyers continued to outbid owner occupier buyers in the existing house market as they could continue their tax and financing advantages (interest only, deposit recycling) when the houses were rented to social housing providers.
(Note: this has led to the the highest rates of unaffordability for owner occupier buyers and the lowest home ownership rates in NZ for quite some time.)
Non owner occupier buyers could continue their tax advantages in the new build market - an incentive to build more residential dwellings.
Rents are up over 10 percent for some. Possibly its because new places are replacing old which means the median rents will migrate higher.
My observation in Nelson / Tasman is the reported increase is pretty close to correct. Typical increase across 25 rentals in family portfolio is $20PW. Main reason for rent increase was tax and insurance increases.
Did you explain to the tenants that the increase resulted in part due to the loss of interest deductibility?
I'm sure they can't wait for the backdated rent cut once it's reinstated.
They'll be glad to see it go down after the reinstating of interest deductibility, eh?
Don't worry, Chris Bishop will take care of you
all you have to do is wait 10 years ;)
Hopefully National will still be in Govt by then, otherwise it will have all been for nought
Good news for inflation if they're settling, let's see what RBNZ say today
I think they will fix the rate while hinting a hike next time.
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