The average rent for new residential tenancies increased by 5.2% nationally in the 12 months to June, easily outstripping wage and general price inflation.
Interest.co.nz’s latest quarterly analysis of rents, based on tenancy bond data from the Ministry of Business Innovation and Employment, shows that the average rent for new tenancies taken out throughout the country was $444 a week in the three months to the end of June, up by $22 a week (5.2%) compared to the same three months of last year.
|Changes in Average Weekly Rent|
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That compares with a 1.1% increase in the Consumer Price Index in the 12 months to March and a 3.9% increase in average weekly earnings (before tax) in the year to March, according to Statistics NZ’s Quarterly Employment Survey.
Those figures suggest that rent is likely to be making up an increasing component of the household budget for many if not most people who are renting, leaving them less money to spend on other things.
It will also be taking a bigger share of government spending through higher rent subsides for people on low incomes, leaving less in the kitty to spend in areas such as health and education.
However, there were significant regional differences, with the biggest increases occurring in areas where rents were well below the national average – Upper Hutt where the average rent increased by $54 a week (+15.6%) and Whanganui where it rose by $30 a week (+12.1%).
At the other end of the scale, four districts in Canterbury; Banks Peninsula, Mackenzie, Selwyn and Waimakariri, posted declines in average rents compared to a year ago, although those figures could have been affected by the relatively small number of tenancies involved, which could make the figures for those districts more volatile.
Perhaps unsurprisingly, the area with the highest average rent was Queenstown Lakes at $596 a week, although the annual increase there was a relatively modest 3.7% ($21 a week).
The area with the cheapest rent was also in the south of the South Island, with Invercargill having an average rent of $261 a week which was up 6.8% compared to a year earlier.
Around the major centres, the average rent in Auckland is now $541 a week up by $22 a week (3.6%) compared to a year ago, and within the region the average rents ranged from $463 in Franklin, which was the only area where the average was below $500 a week, to $583 on the North Shore.
In the Wellington Region the average was $473 which was up $21 (4.7%) compared to a year ago, with the biggest increases occurring in Upper Hutt (15.6%) and Porirua (7.5%).
Although Wellington City rents were the highest in the region at $506 a week, they also had the lowest rate of increase at 3.1%.
In Christchurch rents increased modestly, up 3.1% for the year to $373 a week.
Overall, areas which have traditionally had some of the cheaper rents had some of the biggest increases over the last 12 months.
As well as Whanganui and Upper Hutt which both had annual increases above 10%, Whangarei, Rotorua, Napier and Dunedin all had annual increases of 8% or more.
The figures also showed that most of the increase in rents that occurred in the year to June, happened in the first quarter of this year, when new rental activity was highest, and rents tended to remain largely flat or even decline slightly, in the second quarter.
So from a tenant’s perspective, the winter months are probably a better time to negotiate rent than the summer.
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