By Greg Ninness
Average rents on newly tenanted properties were up 4.1% in the fourth quarter of last year compared to the same period of 2016, while the number of properties that were newly tenanted in the same period was down 0.7%.
Interest.co.nz's analysis of tenant bonds received by the Ministry of Business, Innovation & Employment's Tenancy Services shows there was a slight decline in the number of properties newly tenanted in the fourth quarter of 2017 compared to the same period of 2016, while the rate at which rents are increasing has slowed substantially.
Across the entire country 29,481 residential properties were newly tenanted in the fourth quarter of last year, down -0.7% compared to the fourth quarter of 2016.
That's a turnaround from the previous 12 months, with the number of properties newly tenanted in the fourth quarter of 2016 being up 2.7% compared to the same quarter of 2015.
The national average rent of properties newly tenanted in the fourth quarter of last year was $432 a week, up 4.1% compared to year earlier.
But in the fourth quarter of 2016, rents were up 7% compared to the fourth quarter of 2015.
That suggests rents are still rising, but at a slower pace than they were 12 months earlier.
Those trends are evident across most parts of the country.
In Auckland, the country's largest rental market by far, the average rent on newly tenanted properties was $530 a week in the fourth quarter of last year, up 3.6% from the fourth quarter of 2016.
Across the region's districts, rents rose by between 1.9% in Auckland's central suburbs to 5.1% in Rodney (see chart below).
That's down froma year earlier, when the annual increase across the region was 5.4%, while district rents were up by between 1.8% (Manukau) and 10.2% (Rodney).
That trend was also particularly pronounced in Hamiltion, where the annual rate of rental growth dropped from 9.5% to 4%, and in Tauranga which dropped from 9.6% to 5.2%, Rotorua, which dropped from 12.8% to 6.1%, Hastings down from 11.7% to 5%, and Palmerston North down from 6.2% to 2.5%.
Even the Wellington region, where rent rises have been particularly steep recently, was not immune to the trend.
The average rent across the Wellington region was $457 a week in the fourth quarter of last year, up 6.3% compared to a year earlier.
But that rate of annual growth was down from 9.4% in the fourth quarter of 2016.
There were also signficnat falls in the annual rate of rental growth Queenstown-Lakes, where it dropped from 14.6% to 4.6% and Invercargill, where it dropped from 6.9% to 3.1%.
Areas which went against the trend and recorded a higher rate of annual rental growth included Whangarei, 9.4% compared to 7.2%, New Plymouth 2.8% compared to a decline of -3%, Canterbury 0.7% compared to 0.5%, Nelson 4.9% compared to 0.5% and Dunedin 5.5% compared to 2.2%.
The latest figures suggest affordability is probably having a significant impact on moderating rent increases, and that there is a limit to how much the market will stand even in places where there is a significant shortage of rental properties.
|Average Weekly Rents and Number of New Bonds Received in Q4 2017|
|Average weekly rent $||Change from Q4 2016||Total no. of new tenancies Q4 2017||Change from Q4 2016 %|
|North Shore City||579||4.1%||1,657||1.2%|
|New Plymouth District||338||2.8%||455||-12.2%|
|Palmerston North City||327||2.5%||652||-4.4%|
|Kapiti Coast District||381||-0.7%||257||-12.0%|
|Upper Hutt City||368||11.1%||178||14.1%|
|Lower Hutt City||388||7.9%||475||6.3%|
|Banks Peninsula District||372||1.1%||31||-11.4%|