Big rent rises ‘grim for tenants’

Auckland leads the way with median figure of $480 a week, up 6.7 per cent.

NZ Herald  Feb 21, 2015
by Anne Gibson

WeRent note: As we saw on the ground last month, the big catch-up for landlords is finally happening. Whew… it’s really about time! 

National rents have risen 9 per cent in the past 12 months, the biggest increase recorded in five years and “grim news for tenants”.

Nigel Jeffries, head of Trade Me Property, has just released the data for the year to January showing the median weekly rent is $420.

“The 9 per cent year-on-year increase in January is the largest single-month rise we’ve recorded over the past five years.

“Median weekly rents clicked up $20 per week between December and January to a record high of $420 per week. That’s grim news for tenants,” Mr Jeffries said.

Areas which recorded some of the big rises in the year to January were Auckland up 6.7 per cent to $480/week, Wellington up 6 per cent to $440/week and Canterbury up 8.4 per cent to $450/week.

Figures from property management company Crockers, also out yesterday, showed price jumps for weekly rent in three-bedroom homes for all 30 Auckland suburbs.

Barfoot and Thompson director Kiri Barfoot said the agency’s data showed a 26 per cent increase in Auckland rent over five years, from $388/week in 2009 to $488/week in 2014.

“In the same period a litre of 91 octane petrol has increased by 32 per cent, while a 400ml glass of beer and an adult visit to the doctor have both increased by 22 per cent,” she said.

“With the average Auckland house price increasing by 38 per cent in the same period, it means that tenants are not paying over the top in terms of weekly rentals, and that landlords are not recovering in full the current purchase price of properties.”

Auckland’s apartment market represents more than 60 per cent of New Zealand’s apartment stock and the weekly Auckland apartment rents rose by $10 to a new high of $430/week, up 7.5 per cent on a year ago.

Mr Jeffries said the rental market is responding to pressure from landlords trying to recover more money after big house price rises.

“It was more a question of when – not if – landlords were going to start recovering some level of yield. It looks like that signal has flowed into the market this month and started to sting tenants in the pocket,” he said.

Nationally, rents on three- and four-bedroom properties were up 9.5 per cent to $460/week.

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