Porirua rents sky­rocket


Ex­tra costs for land­lords are be­ing blamed for rent rises around the coun­try - with Porirua suf­fer­ing one of the big­gest jumps.

The NZ Prop­erty In­vestors’ Fed­er­a­tion has re­leased its lat­est statis­tics, drawn from gov­ern­ment ten­ancy bond data, which com­pare the three months ended March to the same pe­riod the year be­fore.

Across the coun­try, rental prices were up 6.1 per cent to $433 per week.

That’s about twice the an­nual in­crease recorded in March 2017 and March 2016.

The largest year on year in­crease was in Hutt Val­ley, where rent rose 17.1 per cent to $413 a week.

Fed­er­a­tion ex­ec­u­tive of­fi­cer An­drew King said that area could be quite volatile due to low num­bers of new rentals.

Porirua was next with an 11.6 per cent in­crease to $407 a week.

Nel­son had the third-high­est rental price rises at 9.2 per cent to $382.

‘‘There have been so many cost and reg­u­la­tory in­creases over the last few years that it isn’t a sur­prise that rental prices are in­creas­ing as they are,’’ King said.

‘‘Un­for­tu­nately the sit­u­a­tion looks likely to con­tinue.’’

Gareth Kier­nan, of fore­cast­ing firm In­fo­met­rics, agreed.

‘‘Grad­ual rises in in­ter­est rates will main­tain up­ward pres­sure on rents dur­ing 2018 and 2019, and land­lords are also likely to try and re­coup in­creased costs as­so­ci­ated with tougher stan­dards for rental prop­er­ties, in­clud­ing im­proved in­su­la­tion re­quire­ments,’’ he said.

‘‘The ex­ten­sion of the bright­line test for cap­i­tal gains from two to five years will limit the will­ing­ness of new in­vestors to en­ter the mar­ket, thereby lead­ing to fur­ther in­creases in rents.’’

But economist Shaum­beel Eaqub said how much de­mand there was for rental prop­er­ties, the num­ber of prop­er­ties avail- able for rent, and how much peo­ple could pay, were much more im­por­tant fac­tors than land­lord costs.

‘‘It’s not as if land­lords have that pric­ing power, it’s a very frag­mented mar­ket.

‘‘It’s more around what peo­ple are able to pay and the de­mand for that par­tic­u­lar lo­ca­tion.

‘‘In Wellington rent went up a lot not be­cause land­lords’ costs went up but be­cause of the squeeze caused by the earth­quakes, and an in­crease in stu­dent num­bers.’’

He said, if there was no de­mand for rental prop­er­ties and lots of ex­cess sup­ply, it would not mat­ter how much land­lords’ costs had risen.

‘‘Rents still wouldn’t rise.’’

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