Median rents surge in Auckland, rise modestly in Wellington and decline in Christchurch

Median rents surge in Auckland, rise modestly in Wellington and decline in Christchurch

The costs of renting a typical three bedroom house in Auckland was $40 a week more expensive in September than it was in September last year, while tenants in Wellington will likely be paying $5 a week more and those in Christchurch will probably be paying $20 a week less than they were a year ago.

According to the Ministry of Business Innovation and Employment, the national median rent for three bedroom houses that were newly tenanted in September was $380 a week, up $15 a week compared to September last year.

Over the same period, the national median rent for two bedroom flats increased by a more modest $10 a week, from $290 a week in September last year to $300 a week last month.  

The information is drawn from the bonds received by the Ministry's Building and Housing division, which holds them on behalf of tenants and landlords, making it the most comprehensive database of tenancy information in the country.

However there were substantial differences between the three main centres, with rents in Auckland rising strongly over the last 12 months, rents in Wellington posting modest rises and rents in Christchurch declining.

In Auckland, the median rent for three bedroom houses has increased from $550 a week in September last year to $590 in September this year, while the median rent for two bedroom flat in the city has risen from $395 a week in September last year to $412 in September this year.

Over the last two years, the median rent for a three bedroom house in the city has gone up by $60 a week, exactly double the increase in the national median over the same period.

Rents are also up in Wellington City although the rises are much more modest, with the median rent for a three bedroom house in the Capital increasing by just $10 a week, from $350 a week in September last year to $360 a week last month, with the median rent for two bedroom flats increasing by the same amount.

But the news from Christchurch was better for tenants than it was for landlords last month, with the median rent for a three bedroom house in the city down $20 a week in September compared to a year earlier, while two bedroom flats were down $5 a week over the same period (see table below).

Weekly Median Rents

  September 2015 September 2014 September 2013
Auckland 3 brm house $590 $550 $530
Auckland 2 brm flat $412 $395 $380
Wellington 3 brm house $485 $480 $470
Wellington 2 brm flat $360 $350 $300
Christchurch 3 brm house $430 $450 $420
Christchurch 2 brm flat $325 $330 $300
NZ all housing types $360 $350 $330

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.


Check this affordable housing scheme from Cameron

Olly Newland predicted just this scenario not so long ago, and now it is coming to pass.

"Unintended consequences" created by the new regulations is yet to play out, but will certainly fall most heavily on the shoulders of the working classes.

In that article you talk about rising rents in auckland and christchurch, But here we see falling rents in CHC. So half right and half wrong, as reliable as rolling the dice.

Brilliant comment. Make two up/down predictions and odds are one might be right...he only had a 25% chance of both being wrong...

Olly Newland 2011: "Rents are steadily rising and will, in my opinion, double in the main centres over the next two to three years". Actual rise in Auckland rents 2011-2015: 16% (Trademe median). Nationally excluding Auckland it's 20%, would be lower if it wasn't for the Christchurch earthquake.

Olly - has the grandissment come to this ?

According to these figures, rents for three-bedroom houses in Auckland are up by about $60 per week in the last two years.

Yet some people on this website tell me it's getting harder and harder to finance a house purchase there!

Yup, it's obvious... life's still good in landlord land.

And Auckland wages have not increased by $60 per week, so that means less spending in the local economy which is leading to a downturn.
I will support any party that takes away the tax advantages a rental house investor has over a FHB.
as in the long run socially this policy will damage NZ and turn Auckland into a city that has some horrible under tones

Sharetrader... using your logic about the tax advantages of anything used for business purposes vs those used for private purposes..... Cars...buses..planes... photocopiers... Alcohol

I recall some inane Tax committee arguing that there was a Tax free benefit of owning a private House as that money could have been invested in ,say, a term deposit and taxed... ( they wanted to tax private housing )
Without common sense .... the intellect can be really stupid.... if that makes sense.

My view is that providing Rental accommodation is a pretty old, well established business.... Don't u think the costs of doing business should be tax deductable..????

My own research shows that it is the LAND that goes up in value over time, and in an exponential way.
This is largely to do with the nature of our Monetary System and the Global Economy ( last 20 yrs of globalization ) and then the Locational Value of Land and then, also, the Policies of the different agencies boundaries.. foreign investment etc.

Throw all that together and we have , in my view, kinda like the perfect storm... ie. I believe we are in the midst of the biggest asset Boom ever... sadly...prices might go alot higher... ( not tomorrow ... over the next 10 yrs )... I wouldn't change that view until I see real Policy Changes and shifts in Monetary views.. by Govts. and Central Banks.. etc

Attacking and Taxing percieved symptoms ALWAYS... has higher order effects (unintended consequences )....

I've always thought a better way to move towards balance in investment preferences would be to allow a depreciation component on money invested in Term Deposits... ( yes... money does depreciate )
AND... that will never happen... In fact the opposite is happening... They call it Financial Repression... Savers are being raped and pillaged the age of deleveraging..

It is such a paradox.... Here we are in a Global Economy of , what looks like, the new normal of low growth...and we have Booming asset prices...

Everything seems arse about face...

Same with the TPP... Kate gave a great link..

Maybe Multi Nationals and Corporates are the new " Landed Aristocracy." .???

my comment comes down to this
individual home ownership rates are dropping year on year
FHB are at a disadvantage to investors
without FHB housing will be owned by fewer people who will own more.
as a society we need balance,
if we take away the ability to buy your first home unless you are born to one of the rich or become rich then we are condemning our young to be renters
the question is how to put the balance back
I favour a mass building program for FHB and have no problem with the government underwriting it
the whole investor rental business was advantaged by previous governments so they could pass to "the private sector" the responsibility to house its citizens
the middle class are paying for this with their taxes Which will only increase over time as home ownership rates fall

..absolutely. A key priority of any govt should be to have an environment in which it's own citizens can achieve/dream of home ownership without having to inherit. What better way to create a healthy and productve society? Tax landlords to death...they are a plague that needs eliminating - leeches.

What a great idea-NOT
Take away "tax advantages" that investors have and it will matters even worse.
Firstly they have no tax advantages.
Investors work under the same rules as every other business.
Secondly if there were some Envy Tax introduced it would be worse for renters because
(a) Rents would go up further as investors tried to recoup losses and
(b) There would be a decline in the number of rentals available over time
The price of houses would not go down because the pressures on the housing market are still there.
e.g.immigration, building costs, land shortages, bureaucracy etc.
( The Looney Left never give up, do they?) miss the point. A property speculator can claim all expenses on owning a home (plus charging many personal 'costs' to the rental). They also claim losses against personal income. A home owner cannot. The family home should not be a plaything of the have's. Many years ago it was not, and guess what - housing was affordable.

I'm no lefty, but anyone with any concern with living in a decent society can see the current tax bias is just plain wrong...

Firstly they have no tax advantages.
FHB can not claim expenses against their income, don't get treated by the banks in the same manner as a investor
we need as a society to have more home owners not just those few of us that can own many
and this from someone that has benefited from the current system and I don't take issue from others doing the same, the rules are the rules but down the track it will not be pretty.

And the corresponding obligation to those "tax advantages" is the "tax disadvantage" of paying tax on the rent received. Take away all my "tax advantages" but don't expect me to then pay tax on my rent. To tax income but deny the costs incurred in deriving that income is theft.

On point b, if the number of rentals decline surely this would mean more owner occupied property? Sounds like a good thing to me.

BigOlly, what makes you think rents would go up to cover costs?

Just as equally house prices could come down until the point that reduced interest costs made investing rational again. Don't you think reduced numbers of investors would lead to price drops, or with migrations pressure etc lower rises than would otherwise be?

One advantage that many "investors/speculators" had was that they were not being controlled by Banks when they went to auctions unlike FHB's who were given a limit by the Bank. Often they saw investors paying way over the odds to get a property and the FBB's could only sit there and get angry as they were being blown out of the water. Just talk to my nephew in Auckland. Whether this is still happening is anyone's guess as new rules are now applying and it seems auctions are not as hot as they used to be. Maybe FHB's will now have a chance to get on the ladder.

The whole economy does not need to go into the crash position for the handful of wailing FHBs and their Left Wing supporters
The vast majority of the market is made up of investors and existing home owners moving on.
Why should this majority be punished for the few no hopers who want something for nothing?
Owing a home is not a right.
It is a privilege that has to be earned by the sweat, toil and tears.

Roughly 3-4 times the sweat, toil and tears for someone who was born in 1990 compared to 1960. Probably more counting student loans. But don't let reality stop your tirade.

"The vast majority of the market is made up of investors and existing home owners moving on" gee that's one heck of a ponzi scheme your describing there. Next your going to be telling us the market is built on massive debt and reliance on capital gains!

Also worth noting (and I often see this getting missed) is that back in "the good old days" the standard ratio (approx. 3.5 times income for a mortgage) was applied to income in a society where generally only 1 person (i.e. the man) was at work full time. Fast forward to today and the ratio is now creeping towards 10 times household income, so that's now a couple's income.

Olly/Daddy is a zealot, no point trying to argue facts, logic etc with such an individual.

In those days you'd also pay 4-5x the price of the house in interest over the life of the mortgage

Not really, those high interest rates were in a high inflation environment.
Inflation was eating away the principle while wages were rising at near the inflation rate.
I think a better comparison would be:-
Interest rates – Inflation rate = Comparable Interest rate

Sweat, toil and tears? Only for those who over-extend themselves, BigDaddy.

But then trying to convince people to do just that is all a part of the business you peddle, isn't it?

The future - robots and robotics

A recent BBC documentary on Robots and Robotics offered the view that by 2020 nearly 40% of all currently existing jobs will either be impacted or replaced by robots, and many of the professions are included in that

Bigdaddy is speaking from his own aged perspective, through his own prism of 40-50 years ago when, if you so chose, you could go out and get a job for life, which in turn gave enough comfort to safely take on a mortgage of reasonable size, If you wanted more, you could even get a second job

Now-a-days those conditions no longer exist, in fact they are going to get worse in the coming years

There will be no guarantee the company or business you are employed by will stay in business, still be in business, or won't have changed owners to an overseas entity, with the risk your face will not fit with the new owners

In coming years it will be almost impossible for the upcoming generation of youngsters to start from scratch with nothing, if they want to stay in Auckland that is

I feel for them - the banks will be reluctant to touch them

up skill in a field that will be in demand such as Mechatronics or Software. I believe that study ( or a similar one ) indicated that high skill science jobs are less likely to be replaced than office work / labor.

hair dressers were actually close to the top of that study if I re-call! Be a while before they'll let a robot loose with a pair of scissors cm's from your eyes.

Legal also up there as can't program robots to argue irrationally, or apply subjective assessments! So you'd include all politics in that group also!

Call centers high on list of those to be replaced.

Teachers low. Can't automate information much further than a book, to communicate complex ideas so that others can understand and interact... possible with interactive video presentation prehaps but I think human tutoring will never be fully automated, just heavily supplemented.

Journalists: cant see robots being creative enough to put a spin on boring news to get headlines anytime soon.

It certainly means you need to go to uni or skill up in a trade and not rely on cleaning or repetitive labour/factory type jobs as these will likely be replaced in full and is already happening.

..actually legal is not up there. The bulk of legal work is 'discovery' and this is capable of being completed by computer. So it too will be hammered, as is accountancy and many professions.

Computers not creative? - yes they are, they are writing music, inlcuding sympthany, now which are indistinguisable and also excellent.

Medicine - google Dr Watson. the software will soon, if not already, be better than you GP (linked to your device which will take al your neccesary readings in real time).

As for teachers, wrong again. Go take a look at Kahn Academy website. Its free and they leave a teacher for dead ..internationall top teaching as opposed to moderatly competent local. Teaching profession never seem to promote it...funny that!

The notion that upskilling will save you is a fallacy. We are the new horse, no longer required for work, for show purposes only.

Which leaves hairdressing....

Of someone your case. Big Noter... If not, you could not pay the probably over leveraged debt. I do hope that is your position.

Because that is just why you have to justify your weakening position almost daily. Methinks one does profess too much.

With our BFF exiting the room, the tide might just turn. Then we will see who is bailing out as fast as one can.

Probably why so many properties are coming on the market. Hoping to cash up before the tide goes out. A tsunami of debt is just that. Ebbs and flows.

Putting all your faith in Houses and your tenants being able to take a raise out of is what the whole world is banking on.

Ask Huntly what happens when commodities change.

Ask a Douche Bank why dividends are not up.

Still Christmas is coming, I do hope you get the gift you deserve.

And that is just a few of my observations today.

Nothing personal, but maybe we need to get back to basics in the economy.

And it should not be debt. wrung from the sweat of others and for generations to come and no hope of a house of their own.

That New Zealand willfully encourages as much overseas debt as possible and putting it all on the House is not just stupid, it is criminal.

Especially when laundering ones position from overseas. It just won't wash for much longer.

Many of us involved in property investment have been warning of just this outcome in Auckland. We get attacked for being "greedy" by many on here. The reality is it's not greed we've just been reporting what we can see happening on the ground.

Many on here have said house prices are so far removed from fundamentals we can't be investors we must be speculators. Yet now with rising rents and lower-for-longer interest rates many property purchases made in recent years will be cashflow neutral or positive (not even to mention the capital gains!). As house prices go up and down over the years ahead we'll see our investments get paid off and our revenue streams and profits increase. Long term investors won't lose sleep if property prices decline 5% in 2017/18... In 10 years they'll be higher than they are today.

All the wailing over recent years from many commenters on this site about the lunacy of property investors yet Auckland property remains a sound investment. Go figure!

Macha, not intending to have a crack at you but what outcome are you referring to? Rents have risen ~5% in Auckland over the past year, roughly in line with incomes. It's hard to see how rents will rise at a faster pace than incomes.

When did you purchase your last property? If it was 2-3 years ago then you probably bought at ~30-40% lower prices and were much closer to an investor than a speculator. If income doesn't cover interest and principle repayments then by definition we are talking about speculation.

The rest of your comment sounds a bit like a pleasant property investment dream where everything keeps going up but who's to say that is how the future is going to turn out?

Rents have risen over 7% on 3 bedroom houses, which must be the main property type for working families ZP. I'm not sure I have the figures you do but have incomes really increased 5% over the past year? Wow, National will be pleased.

Last property purchase was nearly a year ago. I got good deal and have about 20% increased equity so lots of buffer for price declines. It's not quite cashflow positive but I'm young and mainly working towards locking away income streams for the future. I'll be retirement age in nearly 30 years. Will you still call me a speculator when I still own the property then and it's mortgage free and I'm living off the rental income. I guess I could blow all my cash today and pray there will a pension.

Re your last comment, I specifically said "As house prices go up and down over the years ahead" so not sure how you think I'm in a dream where everything just goes up. As per my share portfolio lately lots of down times in between the ups! Auckland property is on a good run but as sure as night follows day it will go down at some point. I've never said anything but this.

M would you be buying 3 bedroomed houses in Auckland today for investment?

Good question Gordon. No I wouldn't. Unless you could get something cash neutral or positive. So no.

So people who are in speculative and leveraged positions should probably sell shouldn't they even if it means a loss as they might lose a lot more if they hold on?

On your last point, I was referring to your comment "Long term investors won't lose sleep if property prices decline 5% in 2017/18... In 10 years they'll be higher than they are today". Prices might decline by more than 5%, they might decline by 30%+, who knows. House prices might not be higher in 10 years than they are today.

On rents, sure 7% this year, 3.7% the year before, it fluctuates. Gaunt quotes above 16% over the last four years. My point is that rents will struggle to consistently outpace income growth - there is a limit to what people can afford to spend - beyond this is a question of how many people are crammed into each house or how much the Government subsidises landlords (I'm getting the impression they don't like the current bill).

Will I call you a speculator when you are mortgage free, no. But if the property is "not quite cashflow positive" at a time when interest rates are a record lows then I would question if it ever will be (of course your view may differ). My point - would the investment make sense if the house had not gone up in value (lets say real value) over 30 years?

Just who really holds your debt...??

Maybe it is Douche Bank.?

They hold a lot of funny money debt derivatives. Trillions in fact.

Maybe your current Mortgage holders on sold the paper to cover their own arses.

Papering over the cracks with funny money is just what the Fed and the Douchebag Banks have been up to.the past few years. Toilet paper for To-let properties.

Someone may come a knocking shortly. Short term gains mean nothing to these people. When they need to cover their gambles, real estate is the first in line

You do not own your property until completely paid off. Leveraging works both ways.

Ask Lehman what happened to their Shylocking about 2008.

Nothing has changed. Except the countries may differ. Iceland, Greece, Ireland...

NZ??? plus others have been targetted as a safe bet....but some people have extended their leverage to gamble some more.

Who holds the aces, when it comes to a default like this. Will it affect your tenants, or you.

Negative equity is still rife.....especially when exported and exhorted overseas.

Nothing has really changed since 2008... just debt got bigger and bigger.

Default is not mine, but it might be yours.

Remember, when the banks start running your life, run for your life. Is my favorite axiom.

They like kicking the can down the road...Remember. Is it in your over inflated street.

For all those who want property prices to crash be warned. The first class of people to go down in flames will not be investors . It will be the developers stuck between costs plus GST and the market. When they go everyone goes, including the innocent.

Collateral damage or friendly fire.
Choose your own wording but just remember whose greed caused the conflagration.

Answer: The Spruikers who day and night advertise on radio and TV that everyone can be rich by investing in property.
It is not that simple.
The work is hard, the days are long and market is impatient.
It takes years to succeed and even then can be very risky without proper advice from the professionals.
Without strategy and a 10 year plan don't even start.
There are no guarantees.

Interesting article in Stuff just now re Chinese buyers deserting the Auckland property market. I am really surprised at this but maybe the fact that they need to provide an IRD number and a bank account number has something to do with it. After all I am sure they like all other "investors" are paying the tax due on sales.

We are being taught a serious lesson here on "how to do it"

Chinese buyers to turn two Auckland farms into vast new housing estates

Chinese interests have just bought two farms north of Auckland spanning 94.4ha which will soon be rezoned from rural to urban, allowing vast new housing estates to be built

One is a 46.4ha property south of Warkworth opposite Valerie Close
The other one is a separate 48ha property on Thompson Rd near Parry Kauri Park

As both properties exceed 5 hectares won't they require OIO approval?
They havent appeared in the OIO approvals list yet
What is it they can do that NZ'ers can't do
What added benefit to NZ does this bring to the table?
Most of the value increase will be attibutable to the urban re-zoning

There has been a reduction in the number of OIO approvals over the past 2 months

OIO decisions July
OIO decisions August

They live within their means and save, something a lot of us in New Zealand and the western world do not do. That is also why they can buy our big farms.

Advocating saving as the way to go

From the news we have been drowned in for the past five years about increases in property prices, the predation of property investors and foreign buyers with cash to burn, it would be instructive if you were to explain how anyone could save - by the way how are your AKL based family associates who are hocked up to their eyeballs going at the moment

Still feeling comfortable?

Pull the other leg gordon.

"Eleven shadow banks have written an open letter to the top Communist party official in northern China’s Hebei province asking for a bailout that would enable the bankrupt credit guarantee company to continue to backstop loans to borrowers. If the guarantor cannot pay, it could spark defaults on at least 24 high-yielding wealth management products (WMPs).

Analysts worry that a series of bailouts in recent years has encouraged irresponsible lending by fuelling the perception the government will not tolerate default. "

Gordon, Greg did a similar article here a week ago -

Double Jeopardy

Have to give an uptick of approval to the Government for the new rules - very shrewd - makes you wonder why they didn't do it years ago - a lot of water has gone over the dam in the meantime

While much has been made of the need for an IRD number and a bank account number little has been made of the following

(a) Foreign purchasers now have to declare their country of tax-residence Tax-Identification-Number (TIN). That will have slowed down any hot-money or dirty-money or laundered money. A foreign national operating a food-stall on the streets of their home-town and operating as an underground proxy and forex facilitator will not want to have to provide a TIN, especially if they dont have one and have been travelling under the radar for years - double jeopardy

It is suggested that, this is a much greater brake-lever than a local IRD number

(b) Local residents who have been acting as proxies on behalf of overseas-kin and friends or associates who have been willing to pay a proxy-fee will suddenly find themselves popping up on the new zealand radar as purchasing multiple properties without a commensurate income to sustain their purchases

That takes local proxies out of the equation

(c) The local smart-money with multiple investment properties held for resale have more than likely been transferring some of those properties between family members or friendlies to move the bright-line test date out to a later date. One thing for sure - the numbers of properties being conveyanced is not known and not available in the public domain

Of course this will create a red-hot market in proxy TIN's or bogus TIN's

Your access to our unique content is free - always has been. But ad revenues are diving so we need your direct support.

Become a supporter

Thanks, I'm already a supporter.