Median national rents rose $25 a week in the year to April

Property / news

New Zealand's biggest rent increases have come in cyclone-affected Gisborne and Hawke's Bay

19th Jun 24, 9:00am by Greg Ninness

Residential rents remained largely flat in April, with the national median rent barely moving since late last year.

According to the latest bond data from Tenancy Services, the national median rent was $600 a week in April and has been unchanged at that level since December last year, apart from January when it crept up to $608 a week before dropping back to $600 in February.

However, compared to April last year the national median rent was up by $25 a week (4.4%).

In Auckland, the country's largest rental market where more than 4000 tenancy agreements were signed in April, the median rent was unchanged at $660 a week from March to April but was up by $20 a week (3.2%) compared to April last year.

Around the country the change in median rent over the 12 months to April ranged from zero in Nelson to $90 a week (16.4%) in Gisborne, which now has the second highest median rent in the country after Auckland.

This is believed to be mainly due to a loss of homes caused by Cyclone Gabrielle, which has worsened a housing shortage in the region.

A similar trend is evident with rents in Hawke's Bay - refer to the table below for the full regional figures.

The comment stream on this story is now closed.

•You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, register here (it's free) and when approved you can select any of our free email newsletters.

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

83 Comments

by IT GUY | 19th Jun 24, 9:20am 1718745632

Still not inside the 3% inflation band target

by 1689 Baptist | 19th Jun 24, 3:02pm 1718766174

rent inflation is one of those things which will actually slow with a lower OCR. Landlords are more inclined to push to the upper band of rents when they are cashflow.consteained by interest repayments.

i expect rents to jump in Auckland following the rate reviews and landlords realize they need to pass on the costs.

by sharetrader | 19th Jun 24, 9:26am 1718746013

don't worry help is on the way soon there will be hundreds of granny flats put on the back of sections and that will put downward pressure on rents

by Iceman | 19th Jun 24, 9:35am 1718746555

Yea because many families will want to live at the back of someone’s house…

by IT GUY | 19th Jun 24, 9:49am 1718747362

I think they are mainly aimed at relatives rather then other families, but there is no doubt that they will help add capacity.

by Pa1nter | 19th Jun 24, 9:52am 1718747563

Probably not a case of "want", than need. If you want to live in a nice freestanding house with a backyard, expect to pay a premium.

by Iceman | 19th Jun 24, 10:12am 1718748724

Not really, just look at the rent of apartments (not even in CBD) with no backyard or space, still a premium - in some instances more expensive than an older freestanding house.

by Pa1nter | 19th Jun 24, 10:22am 1718749334

There's a premium for new, and a premium for convenience.

by Iceman | 19th Jun 24, 10:25am 1718749522

Thanks for spelling that out. So assuming all these granny flats without a premium will be located in wellsford or helensville according that logic.

by Pa1nter | 19th Jun 24, 10:35am 1718750102

They're unlikely to be well represented in the CBD for sure.

by Iceman | 19th Jun 24, 11:01am 1718751683

Hence they will not be effective IMO, people will rather choose apartments for the same price in more convenient locations.

by Pa1nter | 19th Jun 24, 11:06am 1718751963

It's more rental stock, and depending on how it's implemented the capital outlay is far less. That should equate to lower rents.

If a 60m2 owes someone $150k, even if they want to make 15% return, that's still only $150 a bedroom/week (assuming it's a 2 bedroom unit).

If it's twice as much for a regular house or apartment, some people are going to opt for the cheaper option.

by Iceman | 19th Jun 24, 11:21am 1718752860

According to your calculations that’s around $2.5k per sqm to build, that’s well outdated - don’t think you can build even a low spec dwelling which complies with healthy homes standards for that price today.

Anyway - it’s going to take people with capital/ equity to go through the efforts of getting consent and building. I think it will have minimal impact on overall rental stock. If they had the land and were smart, they’d likely sell to a developer to really cash in. Land to add a minor dwelling in good areas is getting rare anyway.

by Pa1nter | 19th Jun 24, 11:32am 1718753568

According to your calculations that’s around $2.5k per sqm to build, that’s well outdated - don’t think you can build even a low spec dwelling which complies with healthy homes standards for that price today.

I can get it done for about $1750. PDK has a way you can do it for under a grand. But you probably wouldn't build, you'd use a prefab or kit. There's prefabs as low as $40k, but they're a bit nasty. $70k gets you a decent kitset home, for another 70 you can assemble it, fit it out, connect it up, etc.

The harsh reality is the cost to build the sorts of properties we've been building is pretty nuts. Especially in the shorter term, if we want lower costs, more rooms and lower rents, we will need to do sub optimal compromises like these 60m2 buildings to make some real traction.

Sucks if you own a $700k+ dogbox rental in Sth Auckland though.

It'll come down to how nerfed the final policy is.

by ChrisOfNoFame | 19th Jun 24, 5:51pm 1718776297

"Sucks if you own a $700k+ dogbox rental in Sth Auckland though."

Oddly. I bought one a few years ago. On a 1,500+ sqm section.

Dogbox is gone. It was recycled.

No. Doesn't suck at all.

Why did you say it does?

by Pa1nter | 19th Jun 24, 9:49pm 1718790585

If you flood the market with cheap rental accomodation, values in super sought after areas probably aren't going to shift much due to the wallets of owner occupiers, but they'll compete strongly with the lower end of the market for rental dollars.

This is all assuming Nationals rhetoric ever comes to light, but reading between the lines they sound like they might actually do something drastic to supply.

by Amokk | 19th Jun 24, 10:08am 1718748503

"Yea because many families will want to live in a granny flat rather than a van/emergency accommodation,shelter…" Fixed it for you.

Question - why do so many of the most empathetic altruistic people on Interest all have the word 'man' in their user names?

by Iceman | 19th Jun 24, 10:14am 1718748883

Amok, there are many on here without any experience and blab on a whole lot of nonsense regularly - Try that as another perspective. IMO granny flats have always been used for teenagers moving out of home, students etc, don’t think they will have much impact. They’re granny flats - they’re going to be small. They won’t be housing many families.

by Pa1nter | 19th Jun 24, 10:23am 1718749420

They're 60m2. So fine for 2-4 people (4's potentially a stretch). When they're living in these smaller homes, there's more total homes available for other people to rent (I.e. families), potentially at a lower price.

by Iceman | 19th Jun 24, 10:29am 1718749753

They’re max 60sqm*

Not everyone will have the space to build up to that.

But I also thought we didn’t want more homes to rent but wanted more people to own homes? (interest.co.nz commenters logic)

by ChrisOfNoFame | 19th Jun 24, 5:57pm 1718776655

The "max" stuff is total bullsh1t.

It creates sub standard outcomes. I despair that governments and councils (and those that support such arbitrary measures) are so naive.

It is horses for courses. Always is. Always has been.

by Pa1nter | 19th Jun 24, 9:51pm 1718790673

Sometimes perfect gets in the way of good enough.

The aspirations of the status quo has failed to deliver enough affordable accomodation for quite some time.

by HouseMouse | 19th Jun 24, 10:34am 1718750042

I tend to agree with you.

my wife and I once rented a granny flat many years ago. Wasn’t a great experience having the landlord living next door, always putting his nose into our privacy. And I think that can go the other way, too. Unless it’s a section greater than 700 - 800 sq m, it’s pretty hard to attain reasonable levels of privacy.

I think it’s an initiative with pretty limited potential. Not saying it’s bad, just fairly limited benefits.

by Iceman | 19th Jun 24, 11:02am 1718751747

Might be too logical for some people on here! Lol

by Yvil | 19th Jun 24, 10:15am 1718748904

Also, many "empathetic, wannabe altruistic" and rightous commenters read and comment without paying anything for David Chaston and his team's work. Quite cynical really!

by Pa1nter | 19th Jun 24, 11:33am 1718753630

In 2024, it's about what you say

Not what you do

by Pat.T | 19th Jun 24, 12:42pm 1718757720

Freeloaders.

Only $1.92 per week to read great well researched articles.

Seems to be the way for some to expect something for nothing.

by Baywatch | 19th Jun 24, 1:01pm 1718758919

I thoughts the ads paid for the Herne Bay office?

by Yvil | 19th Jun 24, 3:16pm 1718766998

They probably do, then you have other expenses like wages for example. Why don't you get a nice shiny green tick next to your name Baywatch ? You seem to advocate fairness a lot on this site.

by 1689 Baptist | 19th Jun 24, 3:25pm 1718767519

I would subscribe but as a landlord, reading the comments here give me a sense of impending financial doom. I then resolve to save my pennies

by Baywatch | 19th Jun 24, 4:39pm 1718771983

I was going to with my tax cut $..but then it got gobbled up with rent rise and diesel RUC, sorry EV RUC charges.

by Yvil | 19th Jun 24, 7:51pm 1718783512

Are you proud of your not-so-funny excuses to not pull your weight Baywatch ?

by redcows1 | 19th Jun 24, 4:02pm 1718769740

Tbf Maybe some like myself have paid but don't appear to have a tick.

by tis i | 19th Jun 24, 6:04pm 1718777090

Yip. $1.92 is a bit light though.

by Zwifter | 19th Jun 24, 11:44am 1718754253

Its going to be worse than that people are going to start digging out under their raised houses and putting in what they call a "Flat". Should be some really nice damp mouldy builds coming to a street near you in Auckland that have no windows. More third world stuff out of number 8 fencing wire.

by Pa1nter | 19th Jun 24, 11:47am 1718754453

I don't think this allows for modifying an existing property.

We don't seem to be able to afford first world, so maybe we're not.

by powerupkiwi | 19th Jun 24, 11:56am 1718754990

It’ll still put downward pressure on rents either way.

by Iceman | 19th Jun 24, 1:25pm 1718760343

Extremely wishful.

by 1689 Baptist | 19th Jun 24, 3:03pm 1718766216

For cheaper rent they would. Yes.

by lockdowndays | 19th Jun 24, 8:23pm 1718785431

I promise you they will and do for the right location - in a good school zone or fairly central. I'll never forget when we lived next door to one of them in a decent area, nice old villa suitable for one family had been split into two plus a non consented container house added - so 3 families squashed into one. And people bemoan high density - it's already been happening on the down-low for years! Just illegally

by K.W. | 19th Jun 24, 11:31am 1718753483

Granny flats are not minor dwellings, they cant be rented out to non-family members. It looks like the Govt is going to implement the Christchurch "family flat" model nationwide.

https://ccc.govt.nz/consents-and-licences/resource-consents/resource-co…

by tis i | 19th Jun 24, 12:11pm 1718755885

That are consulting on minor residential units ‘MRU’s. Not ‘granny flats’.

by K.W. | 19th Jun 24, 2:29pm 1718764168

I wish they would call it that then, as its confusing. And they keep saying its for extended families.

by 1689 Baptist | 19th Jun 24, 3:19pm 1718767171

Willis made it quite clear they could be tenanted on breakfast. Why do councils care if the occupant is related or not?

by Dale Smith | 19th Jun 24, 4:33pm 1718771592

Yes, poor choice of words by the Govt. because 'Granny Flats' does have a quasi-legal definition as something that can only be used by family and a more general definition as anything from a shed/tiny house to a fully code-compliant one-bedroom house.

by tothepoint | 19th Jun 24, 2:28pm 1718764128

Perhaps rent growth will slow down a bit when interest rates start falling?? But that might be a while away……

Landlords without mortgages will be doing very nicely right now. Yields are pretty damned good.

TTP

by JimboJones | 19th Jun 24, 4:24pm 1718771080

"Yields are pretty damned good" - really? You'd get at least double in a TD!

by The Man3 | 19th Jun 24, 4:36pm 1718771797

Term Deposits are for people who do not know how to invest for profit.

they are ok if you want to lock it away and not have to do anything, but personally find that rather boring.

Say you are getting 6% p.a. Less tax and you are getting approx. 4%, so you are losing spending power with inflation etc.

There are far more lucrative and just as safe ways to make $ than TD’s.

All you are doing with Term Deposits is aiding the Housing Market as that money is lent out as mortgages and the Banks are making money on your money.

by JimboJones | 19th Jun 24, 4:53pm 1718772784

I am not saying TDs are great, just that they are currently doing way better than property.

"Landlords without mortgages" also pay tax. They get maybe 3% p.a. - rates - insurance - maintenance - tax. Without the capital gains component it is a terrible investment.

by The Man3 | 19th Jun 24, 5:42pm 1718775761

Personally dont agree with you that TD’s are better than property from my years of experience.

Yes if you bought a property and it has declined in value significantly then you will be correct, however that is not the case throughout NZ.

Not going to go into financial details in here, however I can assure you that there is alot of $ being made on property by many investors and others that deal in property.

Unfortunately the Auckland market was a market increased unrealistically by overseas money, but most of us knew that.

by JimboJones | 19th Jun 24, 7:08pm 1718780914

Sure there was a lot of money being made. But I was responding to the comment that “yields are pretty good” which is simply not true right now, even compared to term deposits. So unless you can see capital gains on the horizon, why stay in property? Kodak shares were a good investment at one time too.

by The Man3 | 19th Jun 24, 7:33pm 1718782430

It depends if you consider a 40% per annum return on purchase price a good return?

20% for 6 months is easily achievable!

by JimboJones | 19th Jun 24, 5:04pm 1718773467

Are you saying that because NZF promised it pre election (as if they intend to do anything they promise!), or is there actually some progress on this?

Edit: Oh I see it now! "Bishop said removing "regulatory red tape" would not only speed up the build process, but was also estimated to save up to $6500 in the standard building and resource consenting fees per build alone." - wow that $6500 must hold back so many builds...

by ChrisOfNoFame | 19th Jun 24, 5:08pm 1718773731

"don't worry help is on the way soon there will be hundreds of granny flats put on the back of sections and that will put downward pressure on rents"

Don't knock it.

Why?

Because it probably will!

by The Man3 | 19th Jun 24, 9:58am 1718747922

I am surprised that the average rent is only up $25 over the past year?

ChCh is up $40 which isnt surprising due to its popularity and quality of living.

Most of ours and other investors I know have raised rents more than the $40 they suggest and even that wouldnt cover the increases of insurance, rates , interest etc.

Nothing surer is that rents will climb as costs increase for landlords.

by HouseMouse | 19th Jun 24, 10:36am 1718750194

Not surprising at all.

Rental supply has been soaring in many locations. Plus during cost of living crises people tend to adapt by doing things such as returning to live at home, more room sharing in rentals etc etc

by The Man3 | 19th Jun 24, 4:30pm 1718771456

Demand in Chch is huge for rental accommodation at the moment and it has been for years.

Landlords need to screen them all as there are many that you would not want as tenants.

landlords can afford to be very choosey at the moment in ChCh.

Tenants know that they are better off currently renting accommodation than buying, due to the stringent borrowing restrictions due to Bank criteria.

by John Mendel | 19th Jun 24, 10:05am 1718748347

My new Torbay neighbour pays rent more than my mortgage, feel sorry for him

by Baywatch | 19th Jun 24, 4:43pm 1718772203

Once you add on insurance, rates ,r&m...he probably pays less than you overall. Still feel sorry for him?

by ChrisOfNoFame | 19th Jun 24, 5:20pm 1718774449

No, you don't.

Every comment you've posted, and I have read, confirms this.

Or are you saying ... You've had a revelation?

;-)

by Mypointis | 19th Jun 24, 10:19am 1718749150

The only reason I have to raise rents is to cover rates (increase about $400) and insurance (increase about $250) which is about $15pw otherwise going backwards. When will councils and insurance companies come to their senses and back to earth?

by Pa1nter | 19th Jun 24, 10:24am 1718749480

If a landlord, homeowner or tenant is paying the bill, they don't have to.

by ChrisOfNoFame | 19th Jun 24, 5:32pm 1718775154

Mypointis: The only reason I have to raise rents is to cover rates (increase about $400) and insurance (increase about $250) which is about $15pw otherwise going backwards. When will councils and insurance companies come to their senses and back to earth?"

Pa1nter: "If a landlord, homeowner or tenant is paying the bill, they don't have to." (posted at 19th Jun 24, 10:24am)

Can someone help me?

What is the Pa1nter saying?

He gets lots of 'thumbs ups'.

So he must be right? Surely?

What has he said?

by powerupkiwi | 19th Jun 24, 12:03pm 1718755423

Until we get a massive increase in supply, the rental market is set at renters’ ability to pay. Nothing more, nothing less

by CN - new | 19th Jun 24, 2:51pm 1718765509

If landlords had pricing power as many believe, then highly leveraged property investors renting out in the long term rental market would be cashflow positive, and not requiring any top ups.

Property investors have been misinformed to believe that they operate in a genuine cost plus pricing environment. Under those conditions, they could pass on the costs of higher rates, higher insurance, higher financing costs and other rising costs due to inflation.

Instead property investors are complaining about rising costs of insurance, rates, etc, adversely impacting cashflow and profitability.

https://www.rnz.co.nz/news/national/519788/rental-listings-up-40-percen…

by Mypointis | 19th Jun 24, 5:31pm 1718775083

I can assure that if you have good tenants that don't cause any issues and pay their rent on time, they will probably be paying well below market, and definitely well below what they could afford to pay.

by ChrisOfNoFame | 19th Jun 24, 5:38pm 1718775518

But not what the bond data says though, is it?

Or perhaps - as J.C. says (he's not wrong) - prices are set at the periphery - and therefore - this is what every tenant should be paying?

by Mypointis | 20th Jun 24, 6:59am 1718823596

Bond data are new tenancies. Legacy tenancies involving good tenants would be an interesting comparison.

by The Man3 | 19th Jun 24, 8:20pm 1718785210

Not sure about that?

if your current tenant can not afford to pay any increase then they will need to find another property that is more their budget.

Ww have had very few that move on due to increase in rent over the years.

by K.W. | 19th Jun 24, 10:38am 1718750314

So rents have stopped climbing since National was elected. Quelle suprise!

by JimboJones | 19th Jun 24, 4:20pm 1718770858

They never really did rise more than inflation, despite massive changes to interest rates and tax rules. Landlords cannot pass on their costs, Quelle suprise!

by kiwi_overseas | 19th Jun 24, 11:32am 1718753572

Hi Greg, please add the median household income for each region and the rent/income ratio & then we can see how truly screwed up NZ is.

It would be useful for Interest.co.nz to maintain that data set with the other housing indicators.

Infometrics provides average rent/average household income which shows rents to be the most unaffordable for their whole data series since 2000.

https://rep.infometrics.co.nz/new-zealand/living-standards/rent-afforda…

From a 2021 MSD paper

60% of low-income private renters (Q1) are in households that spend more than 40% of their income on rent, the highest rate in the OECD

by CN - new | 19th Jun 24, 2:14pm 1718763264

"From a 2021 MSD paper

60% of low-income private renters (Q1) are in households that spend more than 40% of their income on rent, the highest rate in the OECD"

Very interesting.

Can you share the link please. Thank you in advance.

by K.W. | 19th Jun 24, 2:31pm 1718764302

Is that before or after the Govt gives them a ton of money back in the form of the Accommodation Supplement and Working for Families?

by kiwi_overseas | 19th Jun 24, 3:36pm 1718768206

https://view.officeapps.live.com/op/view.aspx?src=https%3A%2F%2Fwww.msd…

The quote is from page 7: "60% of low-income private renters (Q1) are in households that spend more than 40% of their income on rent, the highest rate in the OECD"

The report is also referenced here.

https://www.privacy.org.nz/assets/New-order/Resources-/Publications/Ins…

by JimboJones | 19th Jun 24, 4:23pm 1718770990

So all this stuff about rents rising more than inflation due to Labour's tax changes was just National Party lies?

by CN - new | 19th Jun 24, 5:44pm 1718775881

"So all this stuff about rents rising more than inflation due to Labour's tax changes was just National Party lies"

In a democracy, in order to win at the next popularity contest, the parties in opposition attempts to discredit the parties and their policies in government in order to persuade voters at the next popularity contest. Picture a boxing match with each competitor constantly trying to get jabs at their opponent.

There is a lot of political rhetoric and debate. Politicians are mass debaters and masters of public relations. There may be some merit in some points / perspectives raised but many times there aren’t as the main goal is to score political points with their audience (i.e voters). Ask a difficult and uncomfortable question and the usual public communication strategies are employed in their response.

Then when the previous opposition party gets into power, they blame the previous government.

This is the nature of the game of politics.

by the Joneses | 19th Jun 24, 9:33pm 1718789582

The only comeback against politicians deceiving voters is you can vote them out in three years time. We really need to look into some sort of consumer guarantees act, or at least a code of conduct for politicians. Otherwise, why would they tell us the truth about anything? Imagine if business was allowed to act the same way?

I can't remember anyone going on about Labour making promises in the election campaign that were obviously deceitful or unlikely to happen.

by Property Leader | 19th Jun 24, 4:41pm 1718772119

I have two granny flat rentals. Both ideal homes at reasonable market rents.

by JimboJones | 19th Jun 24, 4:58pm 1718773095

Are you expecting capital gains? Or is the rental yield decent enough compared to other investments?

by 1689 Baptist | 19th Jun 24, 5:24pm 1718774661

I have granny flat esque rentals. The net yields are better than term deposits. The consenting took a lot of time and stress

by kwbrn | 19th Jun 24, 6:21pm 1718778108

Are you factoring in the fifty year building life, repaint every ten years, plumbing fifteen to twenty years etc. Having to deal with tenants in your back yard.

by Greeneggsandham | 19th Jun 24, 10:11pm 1718791911

So landlords are not price setters unless there is a supply shortage?