Landlords outside the main centres are increasing their rents to keep pace with rising house prices, new data shows.
Trade Me Property data shows properties outside Auckland, Wellington and Christchurch are now renting for a median $370 a week, up from $310 a week in 2014. That is an increase of 20 per cent.
Over the same period, the asking price of properties for sale increased 29 per cent.
Head of Trade Me Property Nigel Jeffries said: “This shows us that outside of he main metro areas, landlords are just as keen to make sure rents keep pace with property values to keep their investment yields steady.”
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Bay of Plenty tenants are dealing with particularly steep increases. The area’s median weekly rent lifted another $20 a week in March to $440, the third-highest figure in the country, behind Auckland and Wellington. Rents in the region are up 10 per cent over the year, or $2000.
Over the past three years, Bay of Plenty rents have increased 40 per cent. Northland also experienced strong growth, up 10.1 per cent year-on-year.
In Auckland, the median rent charged dropped back $5 a week over the past month to $515. That is up 3 per cent over the year. There, house prices have shot away from rents.
“Since 2012, the average asking price for an Auckland property is up 72 per cent or $386,000,” Jeffries said.
“On the other hand, the median rent has risen just under 20 per cent. To put that in context, a 20 per cent deposit for an Auckland property in 2012 was just over $100,000 or equivalent to 4.5 years of rent. In March 2017 that same deposit would need to be $183,000 or seven years of rent.”
Canterbury’s median weekly rent is down 3.7 per cent to $395 a week.
“It’s become a familiar story that the Garden City’s rental market is doing its own thing. In March, the median weekly rent for three- and four-bedroom properties slipped back to $435, its lowest point for four years. This is down 3.3 per cent in the past year and a staggering 22 per cent down from the most recent peak in March 2015, where it briefly topped $560.”
Andrew King, executive officer of the NZ Property Investors Federation, said the rental and for-sale markets tended to operate independently of each other.
But he said sometimes, when there was a lot of first-home buying activity in the market, that could dampen rent rises. “Those tenants look to minimise their rental expenditure to save a deposit. They might move home with mum and dad or get in a flatmate and that keeps rents down.”