Article on New Zealand Herald on Housing Affordability and Tenure
It’s further bad news for renters with prices across New Zealand climbing steadily in the past decade to hit a new record high, a report has found.
Massey University’s latest Residential Market Report says national rents jumped 25.5 per cent over the past five years, hitting a record mean rent of $411 in May.
In the 10 years since the Global Financial Crisis, rents also jumped more than 40 per cent.
Report co-author, professor Graham Squires, says the increases together with a drop in the supply of vacant rental homes and number of rental bonds being lodged indicated a tight market for renters.
“The long-term trend shows fewer first-time home buyers as deposit values rise out of reach, which means many are renting for longer,” he said.
“Renters tend to stay longer when it is difficult to find alternative accommodation.”
“A tight rental market also makes it difficult for people to move to new job opportunities, particularly in Auckland and Queenstown where rents are relatively high.”
And it seems there is little relief anywhere in the country.
Christchurch renters had it best over the past five years with rents remaining relatively flat.
Yet, the city had already been subject to a flurry of increases in the five-years prior to that with average Christchurch rents now 30 per cent higher than 10-years ago, the Massey report found.
Auckland rents – despite slowing in the past year – followed a similar pattern to the national trend, jumping by just over 20 per cent in the past five years and almost 40 per cent over 10 years.
Wellington rents jumped by almost 20 per cent over the past five years and almost 30 per cent over 10 years.
Elsewhere, rent increases have been much sharper.
In the Mackenzie District, the average rent jumped 93 per cent in the past five years, driven by increases in tourism and demand for accommodation in Twizel, Tekapo and Mt Cook.
Average rents also jumped 62.3 per cent in Queenstown and 41.9 per cent in Central Otago on the back of tourism growth.
Rents were up 51.5 per cent in the western Bay of Plenty, meanwhile, due to its proximity to Tauranga.
The Massey report comes after property valuer Quotable Value’s House Price Index, released this morning, found first home buyers were still active in an otherwise slowing selling and buying market.
The report found national house prices fell 0.7 per cent in the past three months to an average of $673,797, although this was still 5.1 per cent up on a year earlier.
Auckland home prices, meanwhile, dropped 0.1 per cent in the quarter to an average of $1,050,778, but were up 0.6 per cent compared to a year earlier.
The stagnant prices and a drop in investor activity had left New Zealand’s housing market open to first-home buyers and led “affordable” homes to become the fastest sellers, QV analysts said.
They said properties under $650,000, in particular, were being snapped up quickest.