Facts show rent increases are modest

Facts show rent increases are modest

“Bond Centre figures show that the median rental price for New Zealand in March was $380 per week for March 2015, less than the $420 per week figure reported by Trade Me,” says Andrew King, Executive Officer of the NZ Property Investors’ Federation (NZPIF). “Trade Me figures claim that rental prices have increased by 7.5% over the last year, far in excess of the general inflation rate, and that landlords were seeking to "leverage" the strong housing market.”

“Trade Me's figures relate to the asking rent rather than actual rent and are at odds with official figures using Bond Centre data. This data shows the current $380pw median rental price compares to $370pw in March 2014 and indicates that renewing rental prices have only increased by 2.7% over the past year.”

Statistics New Zealand results, which include existing tenancies as well as new ones, saw rental increases of just 2.3%. This shows that many landlords are not increasing rents for existing tenants.

The NZPIF has just completed a study into the cost of owning versus renting the average New Zealand home. The study shows that allowing for a 20% deposit and including the costs of owning a home, such as rates, insurance and maintenance, it is currently $223 per week cheaper to rent than own the average NZ home.
This result demonstrates that NZ rental property providers are doing a good job of keeping the cost of housing down for tenants even though the costs of providing rental property have been increasing over the same period.

“It cannot be said therefore,” says King “that landlords are deliberately leveraging the strong housing market. The facts show that they have been quite constrained.”

ENDS

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