Landlord cost crunch for rent spike
Extra costs for landlords are being blamed for rent rises.
The New Zealand Property Investors’ Federation (NZPIF) has released its latest statistics, drawn from government tenancy bond data, which compare the three months ended March with the same period the year before.
Across the country, rents were up 6.1 per cent to an average of $433 a week. That’s about twice the annual increase recorded in March 2017 and March 2016.
‘‘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. Unfortunately the situation looks likely to continue,’’ NZPIF executive officer Andrew King said.
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 demand, the number of properties available for rent, and how much people could pay were much more important factors than landlord costs.
‘‘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.’’
The largest year-on-year increase was in Hutt Valley, where rent rose 17.1 per cent to $413 a week. 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 price rise at 9.2 per cent to $382.
Auckland rental increases ranged from 4.2 per cent in Waitakere to 5.2 per cent on the North Shore.