Average nationwide weekly rent up 5% compared to a year ago while average take home pay rises just 2.1%

By Greg Ninness

Housing rents have been rising at more than twice the pace of average net pay throughout the country with Wellington leading the charge, according to interest.co.nz's latest rental market analysis.

Interest.co.nz has compared the average net pay* and average rents* in the third quarter of last year with the third quarter of this year, in the Auckland, Wellington and Canterbury regions and for the whole of the country.

This shows the average residential rent across the whole country was $423 a week in the third quarter (July to September) of this year, up $20 a week (5%) compared to the same period of last year.

Over the same period, average net pay increased by $19.03 (2.1%) per week, which means rising rents would be taking up an increasing share of take home pay.

That suggests people on average or below average wages who are renting are likely to be worse off now than they were 12 months ago because they would probably also have faced increases in other living costs, and wages would not have kept up. 

In Auckland average net pay rose from $942.95 in the third quarter of last year, to $962.18 in the third quarter of this year, an increase of 2.0%.

But average rents in Auckland grew at more than twice that pace, rising from $500 a week to $521 a week over the same period, an increase of 4.2% (see table below).

Changes in Average Weekly Rents v Average Net Pay
   Average Weekly Rent  Average Net Pay 
Region Q3 2016 Q3 2017 % Change Q3 2016 Q3 2017 % Change
Auckland $500 $521 4.2% $942.95 $962.18 2.0%
Wellington $409 $435 6.4% $981.73 $998.02 1.7%
Canterbury $364 $362 -0.5% $887.43 $904.66 1.9%
All NZ $403 $423 5.0% $904.53 $923.83 2.1%

In dollar terms, average take home pay in Auckland has risen by $19.23 a week over the 12 month period, while the average rent has risen by $21.

In the Wellington region the situation is even worse, with average rents rising at almost four times the pace of average net pay.

However renters in Canterbury will be much happier than their counterparts in the north, because the average rent in Canterbury was down 0.5% in the third quarter of this year compared to the third quarter of last year, while average take home pay was up 1.9% over the same period, leaving Cantabrians better off.

Monthly Rent Graphs  
Click on the links below to see graphs plotting the monthly changes in median rent in most cities throughout the country.  
Monthly Median Rent Graphs: (Click to view).  
Auckland region  
Upper North Island  
Central North Island  
Wellington region  
South Island  
Total NZ  

 While rents rising at a faster pace than wages has an adverse effect on the individuals concerned, it also has broader economic implications. That's because every extra dollar that households pay in rent is not available to be spent on other goods and services, impacting industries such as retailing and manufacturing.

 And although rents flow back to landlords, much of that will be used to make mortgage payments and will be captured by the banks, or be soaked up by rising costs landlords face in other areas such as rates and insurance.

*Rent is the average of all rents from new tenancies recorded by Building and Housing in each quarter. Net pay is Full Time Equivalent average weekly earnings recorded by Statistics NZ’s Quarterly Employment Survey, with income tax and ACC earners’ levy deducted at IRD’s standard rates. There is no allowance for student loan repayments or Working for Families tax credits.

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" Every extra dollar households pay in rent ( or Mortgage principal repayment; Insurance premium & Council Rates - all increased by the relative increase in property values) is not available to be spent elsewhere in the economy"
Quite right.... and it's going to get worse as Real Wages ( and probably Nominal ones) fall....


And this is 'growth' that National has created? Growing rents? Great for the established, lousy for everyone else. And people wonder why their time in power was limited?

Isn’t 9 years the median length of a National Government in NZ? I believe 6 is median for labour across all time, but it drops to 3 if you look at the period from 1950- present.


And this is 'growth' that National has created? Growing rents? Great for the established, lousy for everyone else. And people wonder why their time in power was limited?

Yes, that is a very pertinent point. If more of labor and income is allocated to "physiological needs (primarily shelter and food)", that doesn't suggest that your economy is "developed.". In a real developed economy, more income would be allocated to human needs beyond basic life sustenance. Of course, you can use the argument that the "quality of life" is being improved through better shelter. Of course, we know that isn't the case at all.

So yes, it's an example of "rentier economics" in full swing. Or an even more apt description might be "the advance of neo-feudalism."


Good points, but God that's depressing.

A lot of the heavy lifting on rent increases is down to Len Brown/Phil Goff who have for most of a decade prevented new housing in Auckland.


There is a growing movement in 'western' economies away from neoliberal national/tory parties that will probably grow exponentially as younger voters replace us apathetic oldies.

Neoliberalism is great.
Nothing compares in the ability to lift wealth.

However, it is only great when everyone starts from an equal playing field.
This is what the issue is.

So true!!! It's great and fair when everyone starts out at zero, but not so great when wealth stacks thus getting more wealth from others of lesser wealth in a zero sum game. Luckily or not when have a thing called WAR in our own human history that helps reset everyone's wealth.

Bearbear .....
Romans; "oh those silly barbarian Goths, with no wealth, education or organisation, how very dare they assume to challenge us, we have never been beaten, we are the bestest"
Roman's; "oh shit, if we pay you huge sums of money every year, will you leave us in peace"

(Western Roman empire over within 70 years)

I am not smart, so is New Zealanders the romans? Or goths? I honestly believe humans can never avoid war as there will always be the greedy stirring things up for everyone else.

I wasn't thinking necessarily about nation states...wars are often also between classes (or class hiding behind religion etc) I was using the example of the sacking of Rome to show how war can provoke transfer of wealth. Rome was poor after the Goth and Vandal attacks, it's population shrunk to more than half. This has happened in history, beyond counting obvs. So maybe it will be the asset rich class vs the indebted/wage-slave class this time. What I can say with some certainty, is that whatever it is, the majority won't see it coming. The Roman's were utterly complacent about the danger facing them. Even though the writing was all over the wall. Human beings usually underestimate risk and over estimate things remaining the same.

Yes, it is 'great' in theory only.
A number of years ago I was seduced by the theory, before coming to my senses and seeing the reality of it...
Having said that, there are still elements of it that I like, and it's always good to keep the potential wastefulness and 'regulating for the sake of regulating' tendency of left leaning governance honest.

It's a problem of success and over regulation by National to hold up new housing being built. I still don't know why National hate capitalism so much.


3.5 houses per MP is a poor motivator to free things up?

Rents could accelerate further if rental accommodation becomes more scarce, through the impact of rental housing "warrants-of-fitness". That is, some landlords might well sell up - rather than attempt to upgrade their investment properties to the warrant-of-fitness standard - thus reducing the supply of rental dwellings.

If rents continue to soar, Government will need to carefully consider options. Rent controls are one approach (e.g. limiting annual rent increases to the movement in the CPI) but there are obvious fishhooks here - especially to do with monitoring/enforcement.

By the way, I have no objection to housing warrants-of-fitness. No tenant should be living in substandard accommodation. Happy for regulations to be implemented to ensure reasonable standards are maintained by landlords. But rents need to be affordable too......


Could be. But who wants to be the landlord caught without a tenant for too long? In Australia, way back, when Negative Gearing was abolished, rents.....dropped...as landlords didn't want to be without any income at all. I know...I was one of them!


If landlords seek to sell up that increases the supply of houses to the market. Supply and demand will play their parts. In addition, if immigration fraud is reduced (e.g. in the PTE / Pretend Tertiary Education sector) this reduces the number seeking rental accommodation.

Also reduces incentive to build new.

Additionally of the 4 and a half people renting a flat only circa 2 of them will become owner occupiers when the landlord sells the house. You will therefore end up with about 2 and a half extra Tennant’s looking for accomodation as a result of each conversion from rental to owner occupancy. This reduction in supply of rental housing will cause rents to rise.

No, it won't! Chance are that the reduction in people-imports will free up a lot of accommodation is any case. And any conversion ( back) from rental to owner/occupier will have to be cost-effective for that to happen. Again, the chance are that rentals will remain rentals, and those that do buy ( former rentals) will either be family units already or take in tenants as well. There's a whole mix of possibilities....that's what's great about the changes!

Those that do buy will be the wealthiest of the renters and if they wish to take in additional renters they will need the property to meet the expensive rental Wong standards which put the landlord off in the first place. Those left out by all this will be the poorer renters who still can not afford to buy but end up competing for increasingly scarce rental properties.

People import reduction is a seperate policy & even if we get net 0 migration didn’t labour claim a shortage of 75,000 houses or some such? Whilst we have this shortage shifting property to lower density uses ( average occupants per dwelling amongst home owners is still lower than renters ) doesn’t strike me as the smartest idea.

The best thing that could happen if landlords sell up. We are lead to believe that if landlords got out of the business, tenants would not have homes to live in.
The truth is that landlord's houses would not just disappear or remain empty. Families would have the opportunity to buy them.

Hmmm. I wonder what these figures would look like if the average net pay was limited to those who rent, as opposed to generally. I'm sure whilst some renters are earning a very comfortable wage compared to their rent, there will be many others who aren't so fortunate.

guess its only a matter of time brfore rent controls come in, the government topping up rents is an expensive never ending exercise


It is a bit ridiculous that we're redistributing money to subsidise rents. Very wasteful socialism.

^^ agree ^^ although that would be somewhat mitigated by rent controls, if such a thing was introduced.

It is a bit ridiculous that we're redistributing money to subsidise rents. Very wasteful socialism.

Yes, I've always thought the same myself. However, this is "socialism" that somehow applies to the supplier (landlord) and the "consumer" (the tenant). It does not seem like an optimal solution at all. More like a quick fix to protect the status quo.

I guess a lot of taxpayers money subsidizing landlords is going to China

Its a bit ridiculous that we pay Politicians twice, with rentals and over priced Salaries....then steal the lot from those who "Saved".....but no debt....so get taxed repeatedly.

Mugs who did the work, but little reward........now there is a Socialist Slogan...for the coming year.

Accommodation supplement has risen by over 100% for some people. It is all about supply and demand people!

It is all about supply and demand people!

Only for the feeble minded and for people without the ability to think laterally.

Wow, Silly me ... I was only going to adjust rents by about 2% for next year, ... But thanks for the heads up Greg , ... We shall make it 4.6% then ... we should all follow your thoroughly researched "Äverages" to keep up with market -- Well done.

The main problem is and I have pointed this out before. Is that excessive rents not only squeezes citizens in to leaving places like Auckland. But it also kills off business due to them finding it too difficult to retain staff or even hire new staff members. Ultimately this leads to business closing which I've seen happen repeatedly over the last few years. This is even hitting the retail sector now. You'll notice this too if you take a look at your highstreet shops even in expensive areas like New Market and Parnell, that many stores have closed, some replaced by cheap popup shops.

So rember all you dark lords, you'll be left with no one to pay your rent. :)

Good to see Canterbury is still winning the property game

I see why the previous government was so desperate to increase NZ's population base. The net disposable income after housing cost is shrinking at a rapid base. To make up for the falling per capita household consumption aspect of the GDP, the government tried to spike up the overall population factor so that economic growth would still appear promising. No surprises that per capita GDP has fallen over the past two quarters.

This is the same behaviour by the rich that has been happening throughtout recorded history so it really shouldne be a surpise. Capitalism always destroys the society that it arises in by shifting all the wealth into the hands of a few.


Again, its those that haven't taken risks leveraging their incomes, worked hard at renovating their properties and generally having a plan over their lifetime to get some sort of wealth, that moan now. Use the economy or the economy will use you. When will you get that!!! That's the system we have, so work in it. Have a go!

In the 1970's and 80's we were told that superannuation would not be available to us so better try and build wealth so you can live on something later on. So that's what our generation did, or the ones that heeded the message did. So now we come to the situation where money was created around the world to prevent recession. This money settled on assets which went through the roof, and because there was a lot of money available, interest rates lowered substantially. That, and with increased immigration made housing prices very high. That's where we are today. Do I feel bad because I have 7 flats that are specifically designed for the flatting market? No not at all, but I have to be careful that my debt is still being paid for and that the houses are being maintained. I can understand people getting down about not being able to afford in Auckland, but in other regions there are cheaper houses to buy. Or invest in a new build. There is always a way to buy houses. As the building cycle goes flat or negative over the next 3 yrs, there will be opportunities to buy cheaper housing. Salaries and wages will increase so there will be some balance back in the market. This is not only a NZ phenomenon (its Global) so you cant wholly blame the National govt.

Very sensible comment PKchew.

Well done PKchew - one of the better explanations of how things developed, and explained without the usual political bias we regularly see that just misleads the uniformed on the solutions..

Yet some of us have been able to retire and live a very secure life without having to exploit anyone. If I live to one hundred years I will live well.