Rents skyrocket
Landlords blame costs and regulatory increases over the past few years for major rent rises across the country.
Extra costs for landlords are being blamed for national rent rises.
Figures from the New Zealand Property Investors’ Federation (NZPIF), drawn from government tenancy bond data, compare the three months ended March with 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.
‘‘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 more important factors.
‘‘It’s not as if landlords have that pricing power; it’s a very fragmented market,’’ he said.
‘‘It’s more around what people are able to pay and the demand for that particular location.’’
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.’’
The largest year-on-year rise was in Hutt Valley, where rent rose 17.1 per cent to $413 a week.
Nelson had the third-highest rental rise at 9.2 per cent to $382.
Auckland increases ranged from 4.2 per cent in Waitakere to 5.2 per cent on the North Shore.
In Christchurch, rental price falls over the past few years appear to have bottomed out.
While the 3.8 per cent increase in Christchurch to $386 was lower than the national average, it was the first time the city has shown an increase since 2014.