By Greg Ninness
The median rent on newly tenanted homes throughout the country was up 5.4% in January compared to a year earlier, but the rises were more substantial in most parts of Auckland as the region’s housing crisis really starts to bite.
Interest.co.nz has begun collating the median rents in 19 major urban areas throughout the country, based on bonds received each month by the Tenancy Services division of the Ministry of Business, Innovation and Employment.
The information this provides varies from the median rent data available on the Tenancy.govt.nz website which is based on bond rents received over rolling six month intervals.
Tracking the data from bonds received each month will provide a quicker indication of the timing and size of movements in the rents being charged for newly tenanted properties in the areas monitored.
The table below shows the median rent for the month of January in each of the 19 areas monitored and for the whole of New Zealand over the last six years.
It shows a steady increase over that time, but also that the rate of increase has increased significantly over the last two years.
Nationally, the median rent from bonds received in January this year was $390 a week, up $20 (5.4%) compared to January last year.
In Auckland Central, which includes all of the suburbs within the old boundaries of the former Auckland City Council, the median rent was also up by $20 a week over the same period, rising from $475 a week in January last year to $495 a week in January this year, (+4.2%).
But in the rest of the Auckland region the median rents in January were up by between $30 and $50 a week compared to a year earlier giving increases that ranged from from 6.7% in Manukau to 11.1% in Rodney.
Those are significant amounts of money to come out of household budgets each week, particularly for those people on lower incomes and the increases are at a level where they are likely to be be putting some families under financial stress.
Rents up substantially in most parts of the country
However it’s not just Aucklanders that are paying more to rent a home, the table shows that rents are also up substantially in most other parts of the country.
In Whakatane the median rent in January was up $40 a week (14.3%) compared to a year earlier. In Porirua and Upper Hutt it was up $45 a week, (12.9% and 15.3% respectively) compared to a year earlier.
The most expensive rental area monitored by interest.co.nz is the Queenstown-Lakes District, where the median rent in January was $570 a week, up a whopping $120 (26.7%) compared to January last year.
The only area that recorded a decline was Christchurch, where the January median has fallen for two years in a row, from $405 a week in January 2015, to $390 in January 2016 and $370 in January this year.
That’s a decline of $35 a week (8.6%) over the last two years and suggests the rental market in the city is moving more in favour of tenants than their landlords.
While rising rents undoubtedly bring financial pressures for many tenants and will cause financial hardship for some, they also feed into broader economic pressures.
Around 550,000 households are renters
According to the 2013 census, 512,000 households were renting and interest.co.nz estimates that number is likely to have increased to around 550,000 now.
That means that every $20 increase in average rent sucks up an extra $11 million a week, or $572 million a year that is not being spent in other parts of the economy.
It also puts pressure on government finances to cover the rising cost of accommodation allowances paid to people on low incomes.
Most of the coverage of this country’s property market has focused on the huge growth in the price of houses and the distortions that has created in the economy.
But the latest figures suggest the rising cost of renting could be just as big an issue as the various political parties gear up for this year’s general election.
The graphs underneath the rental chart below show the rental trends since 2008 in all of the areas monitored by interest.co.nz.
Over the next few months we will be adding additional areas to those we currently monitor.
Readers may also be interested in this recent article by David Chaston which looked at trends in Auckland’s rental market.