Unexpected fall in rents

Monday 23 June 2008

Rents on houses have unexpectedly dropped in May from their record of $300 a week to $295. The head of Massey University’s Real Estate Analysis Unit, Bob Hargreaves, says this result is “somewhat unexpected as rents have been rising steadily during 2007 and the first quarter of 2008.”

By The Landlord


However, on an annual basis, rents were still 5.36% higher than in May last year.He says the decreases appear to have happened mainly in the South Island.

At this stage it is unclear why there has been a fall. Hargreaves suggests two possible factors; A compositional issue (eg: increased numbers of multiple bonds for the same property), or an increased supply of rental properties.

There is plenty of anecdotal evidence that people have been unable to sell their houses for acceptable prices and have instead put them into the nation’s rental pool, becoming what are known as “accidental landlords”.

Supporting this theory is the significant drop off in the volume of house sales in the past year.

Wellington was doing better than Auckland on the apartment front, with a median weekly rent for three-bedroom apartments at $600, compared with $435 in Auckland, possibly because of areas of oversupply there.

The median rent between the two cities was $288 per week in Wellington and $280 in Auckland.


Median Rents
May –07
Feb –08
May –08
Whangarei
250
275
280
North Shore
370
400
400
Waitakere
320
325
330
Auckland
340
350
360
Manukau
330
350
340
Papakura
300
320
320
Hamilton
280
285
290
Tauranga
290
300
310
Rotorua
210
215
225
Gisborne
215
240
240
Hastings
242
250
250
Napier
260
280
285
New Plymouth
250
265
280
Wanganui
190
185
195
Palmerston North
230
245
250
Kapiti
265
270
280
Porirua
290
300
310
Upper Hutt
242
285
270
Lower Hutt
260
300
300
Wellington
350
390
270
Nelson
272
285
280
Christchurch
275
300
290
Dunedin
230
250
242
Invercargill
180
190
200
All NZ
280
300
295
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