Interesting Trends for Property Investors

Useful Information on Rental Trends for Investors

The New Zealand Housing Quarterly, available in PDF format through the Ministry of Business Innovation and Employment website, shows trends across a wide range of factors of interest to property investors.

The latest report includes a graph showing quarterly changes in average weekly private rents over the past 10 years have been rising modestly on average across the country.  While rents have been falling in some regions such as in Hastings, Wanganui, Upper and Lower Hutt, others have  seen rent increases of over 10%, such as in Central Hawke’s Bay.

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A graph showing the quarterly changes in average private rents for selected regions shows Auckland rental growth has been high since late 2013, and rents have grown by 5.8% over the past year.

However, in Greater Christchurch the rate at which rents were increasing has slowed greatly since the very rapid growth seen after the Canterbury earthquake.  And rent increases in Wellington and the rest of New Zealand have been steady over a number of years at around 3% per annum.

The report also tracks rental yields trends versus price growth for Auckland and Christchurch and notes that while Auckland house price growth has been gradually rising over the last four years, the rental yield has remained roughly constant.  It concludes that this suggests the demand for investment properties is being driven by expected future price increases, rather than higher rental income.  A similar pattern can be seen in the Christchurch housing market, though expected price growth has plateaued at a lower level.

A rental affordability index shows renting in the Wellington region is more affordable than Auckland and Christchurch.