Rents lag property values in Auckland, but in Wellington and Christchurch the reverse was true

Auckland property values rose more than three times as quickly as rents in the year to July, while in Wellington and Christchurch the reverse was true, with rent increases outpacing property values, according to the Ministry of Business, Innovation and Employment's (MBIE) Housing and Construction Quarterly report.

In Auckland, the average rent from new tenancies reported to MBIE during the three months to the end of July was $456 a week, up 3.6% compared with the same period last year.

Over the same period of time the average value of homes in Auckland increased by 11.6% to $720,426.

In Christchurch the average value of a home was $461,176 in the three months to July, an increase of  6.6% compared with the same period last year.

But the average rent increased by 7.3% to $419 a week over the same period.

In Wellington the market was much more subdued, with property values and rents posting only small gains.

The average property value in Wellington was $451,154 in the three months to July, up just 1.2% on the previous year.

The average rent in Wellington was $366 a week, up 1.8% a year.

The results suggest buying residential property became a slightly more attractive proposition for investors in Wellington and Christchurch over the year, because the rental yields would have become more attractive on properties. 

But in Auckland landlords would likely have had to settle for lower rental yields, although they'd have been compensated with increased capital growth.

The dominance of property activity by the Auckland region meant that nationally, rising property values surpassed increases in rents, with the national average home value rising 7.6% to $479.913 while the national average rent increased by 4.1% to $370 a week.