Rents on new tenancies rise 4.5% nationally and 13.7% in Auckland as the residential property market tightens

Rents on new tenancies rise 4.5% nationally and 13.7% in Auckland as the residential property market tightens

There was a significant drop in the number of new residential tenancies in November compared with a year earlier and a rise in median rents, suggesting the rental accommodation market is continuing to tighten.

The Ministry of Business, Innovation and Employment, which holds tenancy agreements and bonds on behalf of tenants and landlords, received bonds for 3196 new residential tenancies throughout New Zealand in November, a 29.8% drop from the 4553 bonds it received in November last year. 

The median rent of those new tenancies was $370.01a week, up 4.5% compared with the median rent of $354.08 in November last year (see table below).

However there were substantial regional differences, particularly in Auckland where high population growth fuelled by strong immigration and an inadequate level of new building activity are combining to put significant pressure on the rental market.

In the Auckland region there were 733 new tenancies recorded by MBIE in November, down 45.3% compared with November last year, while the median rent of $492.93 a week was up 13.7% on November last year.

Within the region the increase in median rents ranged from 2.3% in Manukau, which went against the trend and recorded an 88% increase in the number of new tenancies in November, to an 11.6% rise in median rents in Rodney, where the number of new tenancies in November was down 37.8% compared with last year.

In the Wellington region, the median rent dropped 1.4% in Porirua but was up 10.6% in Lower Hutt and up 4.3% in Wellington City.

In Christchurch the median rent was up 4.7% while the number of new tenancies was down 18.6%.

Although median rents rose in most parts of the country compared to November last year, 13 districts recorded a fall in their median rent, with the biggest decline occuring in Buller where the median rent dropped by 20%, from $250 a week in November last year to $200 a week last month.

The next biggest declines ocurred in Wairoa -13.9%, Gore -11.6% and Central Hawkes Bay -10%.

See the chart below for the full list of median rents and the number of bonds received in November for all districts throughout New Zealand, compared with November last year.

  Median
Weekly Rent
%
Change
No.of
New Bonds
Rec'd
%
Change
  Nov-13 Nov-14   Nov-13 Nov-14  
Far North District 260 260 0.0% 64 47 -26.6%
Whangarei District 300 320 6.7% 114 88 -22.8%
Kaipara District 245 250 2.0% 7 15 114.3%
  ------ ------ ------ ------ ------ ------
Northland 284.08 294.20 3.6% 185 150 -18.9%
             
Franklin 350 390 11.4% 76 56 -26.3%
Thames-Coromandel 290 297 2.4% 30 14 -53.3%
Rodney District 430 480 11.6% 90 56 -37.8%
North Shore 500 520 4.0% 203 165 -18.7%
Waitakere 410 440 7.3% 213 186 -12.7%
Central Auckland - All Properties 515 550 6.8% 350 256 -26.9%
Central Auckland 1 brm apartments 350 367 4.9% 311 276 -11.3%
Central Auckland 2 brm apartments 445 460 3.4% 320 209 -34.7%
Central Auckland 1 brm flat 300 320 6.7% 160 117 -26.9%
Central Auckland 2 brm flat 380 410 7.9% 273 200 -26.7%
Central Auckland 2 brm house 420 440 4.8% 143 101 -29.4%
Central Auckland 3 brm house 515 550 6.8% 350 256 -26.9%
Manukau 430 440 2.3% 321 598 86.3%
Papakura 380 400 5.3% 57 131 129.8%
  ------ ------ ------ ------ ------ ------
Auckland 433.66 492.93 13.7% 1340 733 -45.3%
             
Waikato District 270 300 11.1% 49 39 -20.4%
Hauraki District 242 232 -4.1% 20 14 -30.0%
Matamata-Piako District 280 290 3.6% 49 38 -22.4%
Hamilton City 340 350 2.9% 239 164 -31.4%
Waipa District 310 332 7.1% 49 56 14.3%
Otorohanga District 220 240 9.1% 11 8 -27.3%
South Waikato District 200 190 -5.0% 28 30 7.1%
Waitomo District 230 210 -8.7% 11 9 -18.2%
Taupo District 290 310 6.9% 71 57 -19.7%
Western Bay of Plenty District 285 305 7.0% 56 36 -35.7%
Tauranga District 350 372 6.3% 191 142 -25.7%
Rotorua District 275 277 0.7% 117 92 -21.4%
Whakatane District 300 295 -1.7% 54 38 -29.6%
Kawerau District 170 202 18.8% 11 12 9.1%
Opotiki District 190 217 14.2% 7 6 -14.3%
Gisborne District 277 280 1.1% 58 45 -22.4%
Ruapehu District 162 185 14.2% 12 18 50.0%
  ------ ------ ------ ------ ------ ------
Waikato/BOP 301.82 310.07 2.7% 1033 804 -22.2%
             
Wairoa District 180 155 -13.9% 7 9 28.6%
Hastings District 310 297 -4.2% 77 84 9.1%
Napier City 320 330 3.1% 88 49 -44.3%
Central Hawke's Bay District 200 180 -10.0% 17 15 -11.8%
  ------ ------ ------ ------ ------ ------
Hawkes Bay 299.95 296.07 -1.3% 189 148 -21.7%
             
Wanganui District 237 220 -7.2% 58 46 -20.7%
Rangitikei District 190 195 2.6% 15 12 -20.0%
Manawatu District 270 280 3.7% 25 19 -24.0%
Palmerston North City 295 310 5.1% 129 100 -22.5%
Tararua District 182 197 8.2% 24 20 -16.7%
Horowhenua District 230 230 0.0% 41 45 9.8%
  ------ ------ ------ ------ ------ ------
Manawatu/Wanganui 257.53 260.62 1.2% 292 242 -17.1%
             
New Plymouth District 350 360 2.9% 88 58 -34.1%
Stratford District 240 250 4.2% 15 7 -53.3%
South Taranaki District 230 237 3.0% 35 38 8.6%
  ------ ------ ------ ------ ------ ------
Taranaki 307.61 307.15 -0.2% 138 103 -25.4%
             
Kapiti Coast District 330 360 9.1% 61 49 -19.7%
Porirua City 360 355 -1.4% 35 35 0.0%
Upper Hutt City 367 370 0.8% 34 27 -20.6%
Lower Hutt City 350 387 10.6% 86 68 -20.9%
Wellington City 460 480 4.3% 132 103 -22.0%
Masterton District 250 270 8.0% 25 45 80.0%
Carterton District 250 250 0.0% 10 14 40.0%
  ------ ------ ------ ------ ------ ------
Wellington 381.44 389.13 2.0% 373 333 -10.7%
             
Tasman District 350 350 0.0% 47 25 -46.8%
Nelson City 350 360 2.9% 59 48 -18.6%
Marlborough District 300 320 6.7% 65 44 -32.3%
  ------ ------ ------ ------ ------ ------
Nelson/Marlborough 330.99 342.82 3.6% 171 117 -31.6%
             
Buller District 250 200 -20.0% 13 13 0.0%
Grey District 245 272 11.0% 12 12 0.0%
Westland District 265 355 34.0% 8 9 12.5%
Waimakariri District 365 400 9.6% 20 16 -20.0%
Christchurch City 430 450 4.7% 350 285 -18.6%
Banks Peninsula District 382 400 4.7% 6 13 116.7%
Selwyn District 400 450 12.5% 25 14 -44.0%
Ashburton District 340 325 -4.4% 33 24 -27.3%
Timaru District 290 300 3.4% 44 20 -54.5%
  ------ ------ ------ ------ ------ ------
Canterbury/Westland 398.14 414.83 4.2% 503 392 -22.1%
             
Queenstown-Lakes District 380 430 13.2% 59 45 -23.7%
  ------ ------ ------- ------ ------ ------
Central Otago Lakes 380.00 430.00 13.2% 59 45 -23.7%
             
Central Otago District 280 320 14.3% 23 15 -34.8%
Waitaki District 250 260 4.0% 34 17 -50.0%
Dunedin City 300 310 3.3% 103 77 -25.2%
Clutha District 190 200 5.3% 5 8 60.0%
  ------ ------- ------- ------- ------ ------
Otago 283.58 296.50 4.6% 165 117 -29.1%
             
Southland District 200 245 22.5% 12 12 0.0%
Gore District 215 190 -11.6% 14 26 85.7%
Invercargill City 235 217 -7.7% 79 128 62.0%
  ------ ------ ------ ------ ------ ------
Southland 180 245.00 36.1% 105 166 -88.6%
             
  ===== ===== ===== ===== ===== =====
NZ total 354.08 370.01 4.5% 4,553 3,196 -29.8%

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32 Comments

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If the biggest increase in any part of Auckland is 11% and the increase in most parts of Auckland is 4-7%, then the only way the overall increase can be 13% is if people are renting in different places?

For example more bonds lodged in more expensive rental areas, but it doesn't mean landlords have raised rents by an average of 13%. Very misleading.

Any year rents rise faster than wages/inflation must be a good one for landlords!

"Any year rents rise faster than wages/inflation must be a good one for landlords!"

Nah, as it usually means it's being pushed up by interest, insurance or rates increases being passed on.

And these figures still don't include increases on existing tenancies, you'd see even higher medians if there was a way to capture that data. 

IRD have those figures through their IR3r's   it has the rental gross income at the top and the property value and purchase data and materials at the bottom, and the location at the very top.  Even have the tenancy (letting) time.

Yep, I mentioned the IR3R's with respect to Nick Smith's claim of 11% of landlords being non-resident.  The IRD has the info, but It's not being released.  There's no political will.. in fact it's quite the opposite.

You know why it's not published, dont you?

Yes TOG I think I do.  It's because we have an ultra right wing National government who's intention is to quietly sell every single asset in the country without creating political backlash.  Our prime minister does not want to be associated with killing kiwi the dream of home ownership.  Moreover, climbing the greasy pole in a the public service like the IRD means being perfectly aligned with the views of the current government.  I mean look what happened to poor old Adam Feeley at the SFO, hung out to dry for doing his job.  Shame on him.

Come on everyone. It's Christmas. Extremes of paranoia and fanciful conspiracy theories over immigration might be better suited to the depths of winter ... Lighten up.

The poor renters do not get any relief at Christmas so why should anybody be charitable to the   greed of landlords?
Sorry DC, take it on the chin.
Happy New Year.
2015 will tell a new tale.

I give long term tenants (those more than 52wks continuous rent) who haven't had significant problems caused by them, a rebate of a week rent.  I budget on 50wks occupancy, so I figure its just spliting the love - I'm still up a week, they're up a week they didn't expect. fair'nuff.

Yeah Ive got some fantastic tenants in palmy who never ask for anything, always pay rent like clockwork without exception, paid a total of $110 in maintenance over 2 years as they tend to sort minor things out themselves.. Tell me how much they love the house everytime Im there... Just means I don't ask for a rent rise as Im too worried about losing such quality tenants, so they end up winning as well as over time what they are paying is good value

Your response is a bit of a surprise there Mr Chaston
Did you actually read Fat Pat's comment
I realise the written word is a most difficult form of communication, but
Seriously, how did you get to immigration?

Paranoia? Sheer humbug

Immigration was furthest from my mind in my response. Didnt even arise

Care to explain?

What does arise out of this comment segment is the fact that the IRD can produce factual data, as was clearly evidenced last week by your scribe, Terry Baucher

Yet instead of seeking factual information and informing your audience, you prefer to dwell in the twilight zone of second-hand mis-information and fanciful utterances by politicians. Sometimes balance is good. Maybe Terry Baucher will read this. And, maybe you might invite him to participate more frequently. He is really good value. Factual. Informative.

For those of us in our 30's who are watching the kiwi dream of owning your own home quickly fade (I can't save an extra $50k a year just to keep up with house price increases) there's really not much to lighten up about.
 
Some of the landlords on this thread sound like nice people, but for those of us who don't have good landlords, a life of renting can be pretty sh*t.

Whoops, posted twice...

One non-resident foreign landlord is one too many

Yes it's totally crazy isn't it.  11% !  Even more crazy when you consider that many foreign landlords will have properties in trust.  They'd probably work hard to make sure their trusts weren't "non complying foreign trusts" taxed at 45c in the dollar.  That means NZ domiciled trustees / settlors.  That means the IRD wouldn't recognize those entities as foreign.  That means 11% is almost certainly an underestimate.  SOrry a little off topic but I get hot under the collar about this issue. 

But of course.  As supervisory function government rewards what it wants more of (foreign ownership with offshore profit laundering and givers of perks)   and penalise that which you want less of with more costs and legislation (dairy, FHB, NZ businesses).

It's a solid policy of transformation because of the financial limitations inherent in the system it can't fail.

These figures prove what I have been asserting... all's well in landlord land. Absolutely no complaints from this long-term investor.

So true. There is hardly a country in the world in which landlords have legally as strong a standing as in NZ. Plus there is still decent money to be made, esp. when one bought early enough.
 
 

That's because a sizeable amount of the world is Third World (ie defined as State owned) or in population terms still affected by Communism.  Several that are left suffer from rampant Socialims (which tends towards Third World in property ownership)

11% non-resident - how many of these are Kiwis who are living/working overseas? 
 
I have a lot of friends who left NZ in search of a job in the past years, when times were meagre. No, they did not sell, as they may want to return one day. Most rented their places out.
 
I guess the mainstream here would have wanted them to stay in NZ on dole. True patriotism.
 
Incidentally, walking down Queen St there is hardly a shop not run by Asians these days. Were the original owners coerced to sell mafia-style ... or did they want to make a quick buck? Jees, guys, why not get mad at the greed of the people who sell to the evil "non-resident"?

Yes, you are quite right, it's also quite possible that the entire 11% are comprised of nz nationals who have moved overseas while retaining ownership of their property. Should that be the case then any angst aimed at landlords who are classified as "foreign nationals" is misplaced

It's also possible that the 11% is understated
It's certainly not overstated

However, the IRD possesses data that can differentiate between a non-resident rent-receiving taxpayer who has had an IRD number for many (say 20+) years, and a rent-receiving landlord who has just obtained their IRD number recently
 
Statistics NZ doesnt have that information

Provided that they don't disclose the private identities Statistics NZ has the legislative right to request that information from IRD, should they so choose.  Especially since they know that IRD already have ALL that data already.

Well, then we simply don't know, even though raw data must exist.
 
And in any way, these days it is often hard to distinguish who is "true blue" Kiwi and who is not. I usally think that school socialisation is a strong factor, but I know e.g NZ Sri Lankans who are 3rd generation New Zealanders but totally live within their own community and marry only among each other or back "home". Totally racist, really. On the other hand I know e.g. Swiss and Germans who behave like chameleons and try to be Kiwier-than-thou although they are only in NZ for a few years and will niver-iver get the accent right :-) 
 
Having said all that I am of course not happy either that the country is sold out to just about anyone incl corrupt Commie party scum. Some kind of legal restriction would be fair, given that NZ is tiny relative to the huge money sitting e.g in China. However, be aware that it will somewhat deflate the bubble, if it really was to happen. I dont care personally, because I hardly carry debt, but I bet a lot of people here feel differently about it.

Hang on a minute.
Only last week you were trumpeting that rents were "stuck in the mud"
 
http://www.interest.co.nz/property/73367/rental-growth-slows-auckland-re...
 
Now it's all changed again.
 
Will the real story please  stand up?

Ok.  trumpets please.   Real Story is

news and opinion sells media and adverts.

Facts don't.

Ok. thats all folks.

I can recommend other publications if you seek the solace of academic rigour.

....I guess someone always has a story like this at any time..but it's a first for me.  Landlord with 60 rentals has crunched the numbers recently... baby boomer who is ready to slow up...has decided that the cap gain has come to end and will be cashing up fully....will have 4 x cash in hand from low risk alternatives.  How many more out there thinking same ways i wonder? Very fine tipping point.....just how far aways away is the question? 
My new years pick....when she blow it will sooner, big and quick...

also best get clear before the taxman cometh.  They like to close the door (CGT) then go for the throats (remove/degreade expenses increase compliance)

Look around the world. Which government has allowed a real estate bubble to burst for good? In the UK, Spain, Ireland etc etc etc there was a short price deflation followed by frantic money printing to reflate - and it worked.
 
Not that I like the situation. I think it is crazy and in the long term destructive. But the politicians are hell bent on it, the central and other banksters happily assist and the media cheers a big hooray.
 
Today NOTHING is safe, also as a result of money printing policies. If I had 60 rentals and retiring I would also sell out some, fix up the kids, spend on a few things I always wanted to do. But there is no rush and panic in the move.
 
 

Yet in the 1930s governments allowed the real estate bubble to burst by opening the floodgates to new construction to escape the Great depression. Monetary policy following escape from the Gold Standard allowed private home builders, primarily around the new tube stations in England and state house building in NZ to kick start the respective economies.
Google  Escaping liquidity traps by Nicholas Crafts.
 

Btw, very useful table. Anyone know who owns the copyright? Or is it public domain?