Median rent across the country hit a record-breaking NZ$475 per week in April – with the median Auckland rent at an all-time high of NZ$550, the Trade Me Property Rental Index shows.
Regional rents were up 3.9 per cent on the same month last year, reaching NZ$400 for the first time, while Auckland’s increased 3.8 per cent.
Rent in Wellington was up 6.7 per cent on last April, but reduced from January’s high of $NZ500, down to NZ $480.
Head of Trade Me Property Nigel Jeffries says in a press release that while rents remain high in Auckland, tenants will be pleased to know there are more properties to choose from.
“The supply-and-demand equation in Auckland is getting better for Kiwis on the hunt for a new rental property. The number of rental properties in the Super City is up 19 per cent on last April with the number of rental listings in Auckland City up a solid 35 per cent.”
New Zealand Property Investors Federation executive officer Andrew King says there have been a lot of cost and regulatory increases over the past few years, so “it isn’t a surprise that rental prices are increasing as they are”.
"Unfortunately, the situation looks likely to continue."
King says rental prices have been increasing faster than inflation for around seven years now.
“It started with the ability to depreciate buildings being removed after the last Tax Working Group was established in 2010. Following that, there were enormous increases in rates, insurance and the cost of repairs and maintenance.”
King says house price increases in Auckland from 2012 have made it difficult to buy and provide new rental properties there, and in other areas, over the last 18 months or so.
The Reserve Bank introducing loan-to-value ratio (LVR) restrictions added to the difficulty in buying and providing rental property, King says.
New legislation around insulation requirements increased costs for rentals too, he says.
“The truth is that we actually need more rental properties and all these factors and policies are preventing this from happening.
“People believe that rental property owners have an unfair advantage, so it is fair and reasonable that things are made harder for them. Unfortunately, it is tenants that are paying the price for this, I believe.”
For more information on property investing, read the new issue of JUNO magazine, out 28 May 2018, which is themed Property Investment.
Loan-to-value ratio (LVR): LVR is the amount of your mortgage compared to the value of your property.
First published 23 May, 2018
Story by Claire Connell
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