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Asking rents on Trade Me Property up 7.5% for the year, Auckland rents up 8.7%

Asking rents on Trade Me Property up 7.5% for the year, Auckland rents up 8.7%

The median asking rent for Auckland homes advertised on Trade Me Property has hit $500 a week for the first time.

The median asking rent for all Auckland homes advertised on the website in November was $500 a week, up 8.7% compared to November last year.

That means on average tenants in Auckland are likely to be paying an extra $40 a week for somewhere to live, or $2080 extra a year.

The biggest increases by property type in Auckland were for townhouses, which had a 10% rise in asking rents to $550 a week, followed by apartments which rose 9.8% to $450 a week.

Home units were up 6.7% to $400 a week and 3-4 bedroom houses increased 5.8% to $550.

The median asking rent on Trade Me Property is now $105 a week (26.6%) higher than it was in November 2010. 

However the rise in Auckland rents over the last year was outstripped by those in Whanganui and the Manawatu where the median asking rent was up 17.4%  for the year followed by the Bay of Plenty where it was up 15.2% ($50 a week) and Northland where it was up 10% for the year.

Across the whole country the median asking rent increased 7.5% to $430 a week.

Canterbury, the West Coast and Nelson all went against the trend and posted annual declines in median asking rents.

In Christchurch the median asking rent was $420 a week in November, unchanged from October and down 7% compared to November last year.

Trade Me's head of property Nigel Jeffries said it was the seventh month in a row that the asking rent in Christchurch had been below what it was in the same month of the previous year.

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Yet more evidence that the long-term property investor will always do better than the short-term trader.

Palmy, the beauty of a student city, student room rates tend to be accepted at fairly high levels across the country with less discount given even in cheaper cities like pn.. and the international students are still flocking in = 17% increase in rents yoy which is huge, esp given house prices are up only 5% or so yoy in pn

..your cap gain is about to go dead in it's dont yoy yoy too hard in that beautiful student city of yours because yoy yoy will regret it...

Say something useful Rastus

ok...will do.....Hows about...I just spoke to an associate in Hamilton, had his house up for auction this am. Good family home, new carpet, good schools. Not one bid on any house offered. No visible bidders in the room.....Chinese agent scappered for other pastures...

Not very useful, best I've got for today though..

And I just had a friend sell his place for 1.3million, 400k more than he was expecting. Sold to an investor who has already secured a family as tenants. There is always going to be demand for the right house in the right location - there is influx of people. All that has changed now is that dreamers putting up their crap properties for ridiculous prices will have to get their properties up to scratch but there will still be demand for good properties. Those that think the sky is falling......keep thinking that, but remember more rental property needed, no increase in peoples salaries (so good luck funding a 1.3mill dollar house on you nz income), great tax incentive all adds to the demand for rentals.

Thanks Rastus.


good to see less money to be spent in the shops instead heading overseas in interest payments now we have a country of more renters than home owners, this will really help our economy not

Surprise surprise. I predict similar increases in Auckland over the next 12 months. Any investors who bought 12 months + ago in Auckland should be comfortable about their yield forecasts.

Uncomfortable perhaps 1-2%?

Time to buy a house, plenty about where I live if you have $800-$900K to spend. Interest rates at an all time low for sometime to come. Glad I bought a house 10 years ago, anyone buying one now will probably be saying the same thing in 10 years time. If I had to take a gamble, its still better to own than to rent.

Still better to own than to rent? Nonsense.

Have you done the maths by any chance? How could you possibly say that given current data unless you truly believe house prices will go up forever?
And still with prices going up forever and rents not keeping pace the only reason to buy would be to sell later.

But selling later means having to buy later (upgrade?) in the same overheated market. So what's the point exactly?

And with so low inflation.. how could anybody rational actually believe that?

I guess you're investing heavily now in a second or third or fourth house and not only throwing your optimistic and dreamy predictions over here.

The best advice RIGHT NOW to any first home buyer is to sit on their hands and not to be afraid of missing out.

Get over this obsession of property ownership. There are many countries in the world where actually renting is the smartest option since decades ago and they are doing just fine and old people are just fine with their savings without the need to speculate with houses and ruin financial stability and possibly their lives.

Switzerland has a house ownership rate of 44%. Germany 53%. Austria 57%. Denmark 63%

A house purchase is the most important purchase decision most of the people will make in their lifetime. It requires something more than the property-never-goes-down dogma.

Thats all well and good but having to find money to pay rent in retirement is probably to be avoided if possible......

We rent (a nice 2-bedroom house by the beach and close to our works in our preferred area), we save $700 a week and we put it onto a savings account (liquid cash when we need it) at 3.5% a year.

OBR allowing, we are not concerned about our retirement at all and as per today we're better off renting a house than renting the money to purchase a house (because that's what most of the home ownership is about)

There are better ways to save than relying on dogmas and hoping that prices go always up :)

Its not about prices going up - its about having no debt at that time of your life. Unfortunately not everyone is as disciplined as you and go into retirement with insufficient savings.

Eventually someone with something upstairs!!! FHB need to stay out and wait till things slow down and/or demand is flat. The maths don't make sense for people with small deposits and average incomes. Investors with stacks of capital and long term gains are for this market.....
Do the math and you will see what I mean....

Germany has rent regulation, same as some states of the USA and canada
UK used to that might reappear in the future who know.
its an old theory that helps keep house prices in check
The classic objective is to limit the price that would result from the market, where an inequality of bargaining power between landlords and tenants produces continually escalating prices without any stable market equilibrium.
would it work here, no because the slack would get taken up by the Government in tax return refunds

"The best advice RIGHT NOW to any first home buyer is to sit on their hands and not to be afraid of missing out." - Partially agree, FHB should be bargaining hard if the right property comes about they should buy.

"Still better to own than to rent? Nonsense."

"Have you done the maths by any chance?" - Have you?

You live near the beach and are saving $700 a week at 3.5%, so that's what 1.5m in 25 years time? I presume your rent living that close to a beach will be pretty similar to what you are saving, but 700 a week would comfortably finance a 600k place a 10 minute drive from the beach you could fully pay off in 25 years whilst still saving 700 a week. Ergo 25 years time better off...


If you look back over history you will only find a few small gaps in time where NOT buying actually worked out better than buying. Irrational markets can stay irrational for very long times.

To ever advise someone to sit on hands and not buy right now is far riskier than saying, find somewhere you like and could live for 5+ years, prehaps add value, look at recent sales history, and put in an offer, being happy to walk away if price seems out of wack with other sales.

Certainly true anywhere outside of auckland, buying sooner rather than later would be by far the most prudent advice

Simon , "find somewhere you like and could live for 5+ years" is great advice. Served us well.

A $600k place 10 minutes drive from the beach? You can't be talking about Auckland.

A $1m place 45 minutes from anything is closer to it. In which case we are probably talking about an $800k loan, which over 25 years @ 5% is more like $1,100 per week.

Ergo, if you're setting out to prove it's better to buy, at least use some realistic numbers. Many will argue that for the FHB to "get ahead" they need to move away from the beach to "somewhere they can afford" and "put in the hard yards" with 2+ hours commuting each day so they can "move up the property ladder in a few years time". That is pure fantasy these days - any FHB leveraged to the gills might just end up stuck "in the sticks" with a 30 year loan and negative equity.

If property prices can continue to inflate at 3-4x income growth for many years, maybe it makes sense, but even then the principle repayments needed to "move up the ladder" won't be doable on two incomes (i.e. moving from the $1.2m house to the $1.8m house).

Outside of Auckland it's a completely different story and probably does make sense to buy.

"A $1m place 45 minutes from anything is closer to it..... Ergo, if you're setting out to prove it's better to buy, at least use some realistic numbers."

Sorry Zombie you are clearly very well versed in both geography and the Auckland property market, every 2 bed property within 45 minutes of anywhere is worth $1m, you are 100% right. With that in mind given this is 405k under your valuation so I'll use it as my "realistic numbers"

10 minutes to St Heliers by car list price 595k

Deposit of 20% means a mortgage of 476k @ 5.85% that's $521 a week over 25 years, which will give an extra $179 a week saving in rent to add to the $700 already being saved.

Although given it's truly worth 1m in your book perhaps I should just buy it and sell it again instantly and take the 405k less taxes and other costs as profit.

"Ergo, if you're setting out to prove it's better to buy, at least use some realistic numbers." Ergo, point proven. Mug!

also add in the compounding interest on the savings verses the maintenance expenses which never get included, along with the normal costs house insurance and rates
people always leave out the extra costs of owning a home against renting to justify their numbers

ALSO... one has to calculate the compounding nature of Rent and also the compounding nature of House prices.
A great book called.." hammer that Mortgage" works thru the calculations... ( It is advantageous to own a house vs Renting ).
Compounding rents and House prices, over a long period of time is, largely or partly, because of the nature of our Monetary system... in my view.... MONEY DEPRECIATES
( 1985 M3 money was $85 billion... 2015 it is over $250 billion )

fair point, that is my point you need to calculate all the costsof owning against what your rent would be.
and then if you invested the differance between the mortgage payment against rent where would you end up in ten years.
this is where the renting arguement falls down as most people are not disciplined enough to not dip into it when they want or need something, by the same token some owners up their mortgage to do the same
a simple way of looking at it is in twenty years time i have a 2 million dollar home what is it costing me to run it, house insurance, rates etc agianst i have 2 million in the bank and rent, does it cover my rent do i have any left or do i need to dip into it to live

stick to the argument... :)
Renting vs owning...

I used to think the tipping point was rent paid vs the interest cost of a mortgage... BUT... I found out there is more to it than that..

The other theme of "Hammer that Mortgage"... is that one really should hammer the mortgage... ie.
aggressively pay it down.

Indeed but I do so to reduce risk and exposure. If however you expect a bull market in assets then that extra $s should be put into shares and not paying down the mortgage IMHO (or buy a second house as that income should pay the house mortgage)

Actually the data I have seen suggests Govn bonds over the long term do as well as anything. Which leads on to, the best piece of advice I have ever seen is knowing when to move between asset classes.

Today however I'd suggest everything is blowing bubbles so its quite unlike any other time in history.

Owning over renting has huge advantages beyond the strictly financial. Owning where you live means you have options. You have control. You don't have to move often. It provides a buffer when and if you need such. It's practical and realistic to refine your surroundings to be just the way you want.
Where you live and your surroundings makes a huge difference to the your mental state.
All these things come before the fine decision points of percentages and returns and asset classes.
Given that I do recognise the problem. First home buyers in Auckland are certainly screwed and don't have much option or choices before them. They are leaves in a raging flooding river.

Lol, well done, I think you might have found Aucklands crappiest shed.

If that's the example you're running with, at least acknowledge that our original commentor is likely moving from somewhere comfortable into squalor. That dump *appears* to need $100k+ of work to be liveable. Maybe the driving distance to Starship to have kids athsma treated is more relevant than the beach.

Yes, how embarrassing. A seriously desperate attempt to (dis)prove a point.

Agreed, very very embarrassing to lack the knowledge of Auckland property prices and geography, and just go with the media sensationalism.

Keep digging Danger. Here I've got a shovel if you need a hand.

Not exactty sure what I'm digging but I think it is pretty obviously now that you can actually buy a property in Auckland 10 minutes from the beach for under 600k, and you 100% definitely can get one for under $1m closer than 45 minutes from anything, and that listening to media hype and clowns on here isn't going to make your initial point correct in any way shape or form, sorry Zombie definitely wrong

I'm happy to provide some more context as my point might have been a bit implicit.

Let's call the $1m more like $900k.
Let's call the 45 minutes commute time to the CBD.
Let's call the target property a reasonable size/condition family home (I don't consider either of your suggested properties to be this).

Feel free to spend your day on trademe finding examples, I don't really care, the point is Auckland housing is some of the most overvalued on earth and for a FHB to not rush out and mortgage themselves doesn't make them a mug.

The original poster said he lives in a 2 bed next to the beach. So that's the context of the discussion I was working off when I said it was possible to find a 2 bed in Auckland 10 minutes from the beach for under 600k, he never mentioned the condition of his rented property but from it being a 2 bed I can assume it is not a reasonably sized family home.

Also the poster seems to care more about the beach as they live next to the beach rather than them saying they live next to the CBD, so moving 10 minutes from the beach may make their commute to work shorter, but their commute to their preferred location further.

Yes I know you're still right, this property doesn't really exist, it's not "realistic". And it is still impossible to find a 2 bed property under $1million, under 45 minutes from a beach in Auckland.

Sold for $555 last month again about 10 minutes from St heliers, and a full $445k under the $1m mark

Oh looky here, the same place now available for rent;

Rent = $430 per week.

Ownership costs;
Mortgage, $630 per week (80% loan @ 5.5%, which is generous)
Rates, $31 per week (I checked)
Insurance, $20 per week?
Maintenance, $40 per week over the long term? (being generous)
Let's call it $720 per week total.

In round numbers, investing the deposit (20%) and contributing the difference between ownership costs and rent each month for 25 years, invested at 6% (shares have done much better over the long term), gives $1.37m after 25 years. Will that unit be worth more than $1.37m in 25 years? Maybe. Maybe not. But the original commentor said they were able to save much more than this, so if they invest it well they can probably buy a much nicer place before retirement. It's not for everyone but it certainly doesn't make them a mug.

And yes the cost of renting might keep increasing but who knows interest rates might average 7%.

So not 100% sure I understand what you are saying?

Yes you can get a property in Auckland 10 minutes from the beach for under $600k?
Yes the cost of financing that house to live in is the same as the initial poster would have been paying in rent to live by the beach?
Yes he could still save the $700 pw he is currently saving whilst purchasing a nice little 2 bed?

So if the initial poster was to say decide to buy a property at the figures you mentioned (which are very similar to what I mentioned) he could maintain his current savings plan and pay off the property over a 25 year period given the current level of rent he pays to live next to the beach. Then in 25 years time he pretty much has the same amount of money he would have had anyway (probably 200k less cause of the 111k deposit into the unit), and a fully paid off property which you'd hope increased at an average of 3-4% over the period? Hmmm...

On that Marua Road place, you (and the ad) also conveniently forgot to mention that it's handily located just across the road from the Headhunters gang headquarters, the HQ of the biggest known distribution network of methamphetamine in Auckland. Bargain!

That's fine Espirit I didn't know it was but was only joking about buying it, it was just showing that there are 2 bed properties on the market in Auckland under 600k about 10 minutes drive from the beach, and that not every single 2 bed property in Auckland costs $1m even if it's 45 minutes from anything, it's down to individual preference on house though, some people may class your point as a bonus if they are into heavy recreational use, all down to individual preference.

Muntijaqi, I used to feel the same way as you but after much reading/deliberation and thinking about the topic I now feel strongly that owning is a much better bet than renting, even at the current eyewatering prices. Is the 7% per year sustained over the past 6-7 decades sustainable? Probably not but given the much larger capital base, even a 2% rise per annum over the next ten years will provide more than adequate return on your equity invested. At the end of one year saved you will have approximately $35,000 earning you $1,225 less tax of 33% gives you $820 in the hand. The same invested into a $350k rental with a 10% deposit (assume cashflow neutral - not possible in Auckland but still doable outside Auckland) and appreciating at 2% per year will give you $7,000 per annum tax free. This is not to mention the enjoyment you get from owning your own place, or the rises in rents that will happen over time (rents in Auckland in 1993 were $211 pw).

I wouldn't go jumping in to buying an Epsom trophy house at 1% yield but it is generally much better to own than rent.

Returns of 7%+ pa are a phenomena of the last ~2-3 decades largely due to ever lower interest rates, more dual income households, longer duration loans and a higher portion of household income being spent on mortgage repayments. Will these trends continue allowing ever higher real prices? (I think you can guess my view).

The 2% rise per annum scenario works, but there is a strong possibility of flat or falling prices which can't be ignored (Auckland in particular). For example, a 15% price drop and 2% returns thereafter would take ~9 years to get back to even (longer if you count opportunity cost).

I guess it all comes down to your view of future house prices.

Actually the math is quite complex if you factor in everything. Clearly you have not. I kept it simple tho, another couple of hundred a week and I'm paying a mortgage instead of dead money on rent. You know your repayments and you can keep them pretty constant unless there is some sort of interest rate rise into double figures. You have no control over the cost of your rent. Now own 100% of a $750K property because it was $460K when I bought it. If you had to make a bet then its going to be a $1M property in another 10 years time. As soon as you mortgage is paid you can also pretty much retire if you want to. There is a lot to factor in besides the "Math".

and what will be the total you paid for the 460K house when you are finished, good times with low interest at the moment but when you brought they would have been higher and i suspect will be higher again in a couple of years.
i agree to live in a mortgage free home when you retire is the way to go but what is the best way to get there

Not really a choice for most working families in Auckland.

if you bought a year ago at 2% net or 4% gross yield rough estimates would indicate that you should now have 4.4% gross / 2.4 % net yield. if this continues at the same rate next year gross yield will be 4.85% and net yield will be 2.85%. at worst these yields represent similar returns to savings accounts, at best they represent a healthy profit with a long term asset.

Hang on. Your net yield is surely before interest repayments yes?

If you're paying ~4% in interest to return ~2% you are negatively geared and feeding your 'investment' money to keep it afloat. It's a wonderful strategy while prices are increasing, it's a poor strategy while prices are flat and it's a terrible strategy while prices are falling. Leveraged gains on the initial deposit can easily exceed 50%+ or cost you the entire deposit. It's a gamble (by all means convince yourself otherwise).

The other argument I love is "based on my purchase price the property now yields 8%!".....yeah but the fact is you're getting 2% based on it's current price, you could sell the property and invest in something that returns a safe 5-6%. "Yeah but then I'd miss out on the capital gains"....ahhhh so it's not about yield at all.

palmy yields going from net 6% to net 7% after rates (which incl water), insurance etc... Borrow at 3.99%, earn at 6%... generally that sort of dynamic is self correcting where prices rise to correct the imbalance (such that net yields become atleast say 4% or less).. hence easy money made positioning capital infront of such dynamics, and waiting for the market to catch up...

To put the above 'imbalance' into perspective... A 250k 4 bedder in p.n earning 380 a week today would see its price rise to 405k before net yields would correct to the current cost of capital (taking 4%).

Or be slightly more conservative and use 5% as net yield (cost of capital), still see price become 330k.

Have you seen the property states they are down big time...up the rents to compensate. The fall is just in property is just the beginning.

Yet more evidence of New Zealand's housing policy failure.
Median weekly income up 4.3 per cent.

Best idea ..... if you can get an income working from home or at least a reasonable job outside Auckland ....JUST DO IT !!! and move out of Auckland ...what would you be missing ? :)

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See Party Policies here. Party Lists here.