Are renters reacting to affordability issues too?

Are renters reacting to affordability issues too?

Are renters staying in their homes longer? The latest bond registration data reveals a surprisingly low number of new transactions registered in December.

The data supplied to from the Department of Building & Housing shows that only there were only 7,782 bonds registered in December 2010, down from 11,999 in December 2009 and 12,496 in December 2008. This December data follows soft numbers for November 2010 as well.

On the other hand, the median rent value for these new bonds registered is unchanged on a national, all-types basis at $300 per week. However, in the main centers, rents registered with a new bond are creeping higher.

Median Auckland City rents for a three bedroom house came in at $480 per week, an all-time high, although there were only 209 of these type of rentals registered, the lowest level since we started keeping track of this data in January 2006.

In Wellington City, the median rent for a 3 bedroom house is dropped a bit to $430 per week, and the volumes were also very low, at only 89 houses registered.

In Christchurch City, the median rent was $330 per week, a record high, but the volume was only 220, at least a four-year low since the start of our 2006 records.

Similar trends are evident for two bedroom flats.

One explanation may be that renters have decided to stay put. The data we are publishing today on median rents for bonds registered does not cover rental value changes where renters do not move properties. That data is anecdotal only, and come occasionally from press releases issued by realtors and professional rental managers.

Our monitoring of online For Rent listings on both Trade Me, and shows there has been a considerable rise in listing since October, continuing a rising pattern that started in March 2010. A record peak occurred just before Christmas. This listing peak happened at the same time a listing peak happened for houses for sale.

Affordability may have reached a limit, from which renters are not prepared to pay more for even for a 'better place'. We compare the relationship between the costs of owning and of renting in this research.

We welcome readers' analysis of what may be happening in the rental markets, because certainly market forces are starting to behave in a noticeably different way.


We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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.


Wow, I beat Wolly!

Tenants are probably at the top of their budgets.  With most of the property managers now being able to charge a letting fee (one week rent plus gst) it is just getting too expensive to move.

Rents increasing - people staying put.

Symptomatic of a property shortage.

When will you realize that your house isn't being more sought after it is being less sought after!!

Why are rents going up?

Why have I not had a vacancy in 5 years?

Why do you try and sound like you know what you are talking about?

Rents go up because the money supply goes up, I think you will find that the percentage increase is probably about the same, they dont go up in real dollar terms.


You probably haven't had a vacancy in 5 years for 2 reason 1. You are lying, 2. You have a nice property and charge a good rent.


Because I do know what I am talking about.

I was eating we are stuffed...maybe this move to rent...supported with $1.5billion a year in govt subsidies to landlords! helping the regional property price collapse...who would buy in a region facing more would be left with no buyer...perhaps the govt subsidy is working against the plan to pork the bubbles to save the banks.....I wonder what will happen when the renters decide to upstakes and bugger off to aus.

I have recently renewed 3 contracts in January and all tenants wanted to stay on for a further 1-3 years.

Rent for 2011remained the same for one, $10/wk more and $15/wk more for others

I'd assume more renters are staying put as there has been a drop in the turnover from renting to home ownership.  And that is coupled with fewer rental properties being sold by landlords wishing to quit the property.

This reflects the sales market where the low end 'first home' and/or rental investor market has dried up.

Good for renters as during the height of the property boom many landlords wouldn't even consider fixed term rentals - now the opposite is the case - the majority prefer fixed term.

I get the general feeling NZers are hunkering down for the time being.

Good guess Kate...who knows how long the hunkering will may become a cultural thingee.

In parts of Europe tenants have rented the same houses for generations.

That is real LONG term tenancy:)

Is it possible that a contributing factor is the rising unemployment numbers. While the boom times were still going people were highly mobile and would move when they moved jobs. Now the trend has reversed. We would need to see figures going back to pre boom to give this idea any credence.

Most comments reflect opinions that house prices will fall and your money is safer elsewhere.

Just before my Dad bought his house for $11,000 in 1962 a guy told him not to buy, prices were falling, that house prices were going to drop.  Good thing he realised that guy had no wisdom and was in fact a fool.

2011 = 1962?

Well consumer magazine published a graph a couple of years ago that shows you could buy a house for the same price in 1981 as you could in 1961. I am assuming it was inflation adjusted. The prices rose slowly until 1973 or so and then declined for the rest of the 70's.

They didn't have a fiat currency in 1962. You may want to look up that graph because it clearly shows the current boom bust cycle started in 1986 when the dollar was fully floated.

With the current volatility of currencies all gloves are off and your money isn't safe anywhere.

I think you will find that general opinion isn't against housing as such, just having a mortgage. Although I am renting:)

Unemployment is not rising scarfie - where did you get your latest false piece of information from?

Depends on your time frame. In terms of the article unemployment is about double what it was at the start of 2008. And that is the official numbers that doesn't count the sickness benefit.

Considering that and those out of work but not registered, I think you will find the real numbers are about double that.

You think unemployment is heading higher in 2011?


Have taken my opinion of that out. Lol. But yes I do, although cleanups in Aussie and CHCH could distort the underlying problems.

See I was crewing on a boat in 2009 for about 10 weeks. There were two Irish guys on board and during the duration of the trip the Irish UE spiked from about 7% to 12%. 

It can happen very quickly.

Two Irish men and a kiwi on a boat - what does that sound like?

Yes - a joke !


You will have to face facts eventually - why is it so hard?

 When is this smart growth based housing shortage policy going to end? When are we going to see the hundred thousand dollar starter house (renting for say $200 a week) again in the main centres? When housing costs were at those levels only very low income familes and some beneficiaries needed housing assistance. Now fifty per cent of tenants receive demeaning and poverty trapping subsidies and the rest of us are being savagely taxed to pay for them.

Your last two sentences really made me sit up.  When you put it like that the whole housing issue is just a joke.  Especially when you consider that these days most households have two incomes (or one and a half) as opposed to one "back then".  Ridiculous, totally ridiculous.  But we'll all keep paying our taxes so the govt can redsitribute it via WFF and housing assistance, anything to keep the bubble inflated!

The richie rich trustfund kiddies at the top pay SFA tax while reaping most of the corporate welfare benefits, while the rest of the country's population - the grossly overtaxed and underpaid population -  financially supports them.

That's a bit of a silly comment gingerbreadman as the facts show top 10% earners pay 50% of tax and bottom third effectively pay no net tax at all

For the record there has not yet been any 'smart growth'.  Have you ever read a district plan?  Have you been to Flat Bush or Albany recently?  Try converting a Res1 villa into 3 flats nowadays - it was easy a few decades ago.

My accountant tells me its finishing with the new trust changes due to be announced in a couple of months and is the other side of the removal of gift duty. He's not overly happy about it as I suspect he hasn't being paying much tax , he does make me pay my fair share but thats another story.

I agree with you Wolly – idiots endlessly - day in day out talking about properties, %, charts, 120 year anniversary, 2,75% government bonds, SAF, YRT, KLO and other minor BS.

Smiling Auckland Brown sais: Public Transport is great – ohh yes 100% imported. Does he really know what he’s talking about ? How on earth and for how much longer can the government afford such investment ? When do people wake up in this country to reality – people we have to produce in order to afford our life- style and financial independence – that is a highly practical job for the nation - nothing for chair- polishers sitting in Real- Estate offices etc.

Yeah - wait and see PM – when under a series of unpredictable worldwide events our agriculture exports industry and tourism collapses – where does the money come from – where is the buying power of the population, especially for imported goods ?


The evidence seems to support the fact that tenants are staying put;we know from the statistics that numbers of new builds are way down - the population is still inceasing, & they have to live somewhere. That is propably underpining the rental market.

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