Static rents tough for landlords
The times are not easy for landlords as asking rents remain static around the country, new Trade Me Property data reveals.
Thursday, April 21st 2016, 11:00AM
by Miriam Bell
Popular perceptions of rent-gouging landlords have, once again, been knocked asunder by March’s rental data.
Around New Zealand, asking rents remained stagnant with the national weekly median, along with those of Auckland, Wellington and Christchurch, remaining unchanged since February.
This left the national median weekly rent at $430 – the same as February and up just $10 a week year-on-year.
Auckland’s median weekly rent stayed at $500, having increased just $20 year-on-year, while Christchurch’s median weekly rent stayed at $420 for the sixth consecutive month.
Head of Trade Me Property Nigel Jeffries said it’s not an easy time to be a landlord.
“And particularly not one who has bought a rental property recently as they won’t be getting the assistance they want with their mortgage.”
The gap between prices in the “for sale” and rental markets has widened significantly – especially in Auckland, he said.
“While the enormous demand in the Auckland for sale market is driving prices through the roof, the same can’t be said in terms of rent where we’re seeing a very stable rental market with strong supply.
“We’ve crunched the numbers and a tenant in Auckland would need to pay rent of $500 per week for 32 years before spending as much as someone buying a typical property at the city’s average asking price of $834,500.”
However, the news was better for landlords with rental properties in regions around Auckland.
Jeffries said the so-called “halo effect” is having a major impact in certain areas.
The Bay of Plenty (up 17.6%), Waikato (up 12.5%) and Northland (up 9.5%) have seen record jumps in median weekly rents over the last year.
In comparison, Auckland has only seen a 4.2% year-on-year increase in median weekly rents.
Meanwhile, the Christchurch market is struggling to recover from a significant fall in median weekly rents.
Jeffries said that March 2015 was the absolute peak of the Christchurch rental market.
“We’re now seeing the market settle into a more sustainable and realistic rent bracket as supply in the region returns to normal.”
Around the rest of New Zealand, Gisborne (down 10.7%), Taranaki (down 5.4%), the West Coast (down 8%), Nelson/Tasman (down 1.4%) and Canterbury (down 15.5 %) all saw year-on-year declines.
On a brighter note, when median weekly rents were broken down into property types, Trade Me Property’s data again showed that small can be better.
Median weekly rents for small houses (one to two bedrooms), and units were up significantly – both nationally and in Auckland.
Small houses were up by 9.4% to $350 nationally and by 7.7% to $420 in Auckland.
Units were up by 12.9% to $350 nationally and by 12.2% to $415 in Auckland.
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