Rents soar 50pc in some parts of New Zealand

Monday, 26 November 2018

Prices have risen fastest in regional New Zealand.

Whangarei woman Evelyn Sutherland has lived in her rented home in the central city for the past three years.

In that time the rent has risen 15 per cent.

'This house is a bit small for my family but we put up with it because trying to find something that will [take] our animals is a mission.'

She now pays $395 a week and expects that would jump to more than $400 if she had to shift.

* Landlords reveal why your rent is rising

* Limits on rent increases and an end to rental bidding as Government reviews rental rules**

But Sutherland has experienced a small rent increase, compared to the rest of Northland. Trade Me data shows Northland's advertised rent is up 43 per cent since 2013.

Sutherland said that seemed to have been driven by a lack of suitable rental accommodation, poor tenants 'spoiling it for the good ones', and then landlords selling their rentals.

Evelyn Sutherland says her local rental market is a tough place for tenants to be.

Another Whangarei woman, Jenny Hamilton, said she had been left homeless for six weeks last year when she was given 42 days' notice to leave a property because it was sold - but couldn't find another place to live in time. 'It ended up me and the kids bunking in with another family. There just aren't the houses out there. Rents are rising, pushing them out of reach.'

It's a common story around the country.

The Trade Me Property data shows wages have not kept up with rent rises throughout New Zealand, making renting more unaffordable as the years go by.

Since 2013, rents have risen 25 per cent in Auckland, 33 per cent in Wellington and 32 per cent in Waikato.

But some of the fastest rises happened in the regions - rents were up 45 per cent in Otago and 48 per cent in Bay of Plenty.

Only in Christchurch has the situation got better - there rents are down 2 per cent. In Gisborne, they haven't moved.

Head of Trade Me Property Nigel Jeffries said there had been a significant increase in demand in regional New Zealand.

'The regions neighbouring Auckland, such as Bay of Plenty and Northland, have experienced a big boost in median weekly rent as Kiwis in the Super City look further afield for cheaper rent,' he said.

'Wages haven't keep up with rising rents which has meant rental affordability is continuing to decline

'To some extent this a symptom of our own success. New Zealand is a very popular place to live and work compared to many parts of the world and these increases are tightly correlated to our growing population. Unless the supply of rental accommodation increases we can expect rental prices to continue to charge on.'

Economist Gareth Kiernan said the strength in the housing market, New Zealand's economic growth and population growth had been major factors in the rent increases of the past five years.

'Looking forward, forecasts for all of these indicators are that they will be softer than in previous years. There might still be some catch-up in rents to occur relative to house prices given that rental yields have fallen over the last few years. Generally, however, we would expect slower growth in rents than over the last five years. I'm talking broadly for most regions, although Canterbury is an area that has been performing differently to the rest of the country given the housing market's post-quake dynamics.'

Mike Butler, of landlord representative group Stop the War on Tenancies, said rent increases would continue as long as demand for housing was strong.

'High demand means that owners can currently pass on extra costs to tenants instead of having to absorb them. The high demand won't last forever, because new properties are being built and immigration can decline or be reduced.'

* Comments on this article have now closed