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  • Rents flat in June

    From our friends at interest.co.nz



    Figures from the Department of Building and Housing show the median rental for New Zealand was NZ$300/week in June, unchanged from May and broadly unchanged since early 2008.
    The Department of Building and Housing collected data from 11,065 rental bonds lodged with the Department in June.

    The median rental has been unchanged at NZ$300 since November 2009 and contrasts with comments from some landlords that rents were rising or would rise in the wake of changes announced in the May 20 budget removing the ability to claim depreciation on buildings.

    The median rental was around NZ$300/week in early 2008 before falling to NZ$290/week in late 2008 and then bouncing somewhat to NZ$300 in late 2009.

    Auckland's largest real estate agency group Barfoot and Thompson reported it rented out 690 properties in June and that the average weekly rent was NZ$403, up NZ$5 from May and up NZ$15 from a year ago.

    The Department of Building and Housing's figures obtained by interest.co.nz show the median rental for a three bedroom house across New Zealand fell to NZ$315 from NZ$320 a month ago, but but was up from NZ$310 in June a year ago. The median for a two bedroom flat in June was NZ$245/week, down from NZ$250 in May and down from NZ$250 a year earlier. Here is more detail on the Department's website of rents in various cities and regions.

    In Auckland, the figures (reproduced below in our interactive chart) showed the median rent for a three bedroom house was NZ$460, unchanged from May but up from NZ$450 a year ago. Auckland house rents are broadly up from NZ$430 in early 2008, in line with wage inflation.

    Auckland 2 bedroom flat rents were NZ$330/week in June, up from NZ$320/week in May and NZ$315 in June a year ago. They are also up in line with wage inflation over the period.

    Wellington house rents and apartment rentals have risen slightly faster over the last two years. The Wellington median 3 bedroom house rental was unchanged at NZ$450 in June from NZ$450 in May and NZ$450 a year ago, but is up from around NZ$400 in early 2008.

    Wellington apartment rents are up from around NZ$300/week in early 2008 to NZ$320/week in June, although this is down slightly from NZ$330/week in May and up slightly from NZ$314 a year ago.
    Christchurch and Dunedin rents have been broadly flat since the recession began.

  • #2
    Interesting that- I just re-let a 1 bed place last weekend at $15 more.

    Just shows how irrelevant the median number is or the incompetence of interpreting the numbers !
    all of their specific examples showed increases yet they say the median hasnt changed !

    I counted 9 "ups" 4 "unchanged" & 5 "downs"
    Last edited by Keithw; 07-07-2010, 01:56 PM.
    Food.Gems.ILS

    Comment


    • #3
      If the median is unchanged after the properly dedicated landlords on this board have all put their rents up, it speaks to just how many lazy, unprofessional landlords there are out there...

      Comment


      • #4
        Originally posted by kyotolaw View Post
        If the median is unchanged after the properly dedicated landlords on this board have all put their rents up, it speaks to just how many lazy, unprofessional landlords there are out there...
        i dunnaknow........................

        in my book

        the highest priority for a good pm is to keep the place occupied

        next is to try and keep it in as good a condition as possible

        somewhere after those 2 is maximising it's return

        not too many bosses handing out pay rises at the moment

        so where's this additional rent to come from?

        the ciggy or booze budget?

        drive less in the car?

        holiday spending?

        less savings for house deposit?
        have you defeated them?
        your demons

        Comment


        • #5
          I had my tongue in cheek a little there. Personally I don't believe that landlords will in aggregate be able to raise rents over the next few months while the economy holds us back.

          However, every time Bernard Hickey opens his mouth, everyone here seems to say, "But I raised my rent this last month..."

          I do think that there are more serious landlords on this site who are focused on returns from property than the average pool of landlords. If we can raise rents, we are more likely to do so.

          And if landlords here who are able to raise the rents have done so, and yet the median remains unchanged, there are a lot of landlords who either aren't able to raise rents, or aren't inclined to.

          Comment


          • #6
            Also remember that the changes have only been signalled at present, they haven't begun yet
            so allow 60 days for advice of rental increase AFTER the landlord decides to actually put it up.
            Some will wait until 31 March when changes are actually put in place
            Some may pick Oct - GST increase time
            Some will not do anything until they work out their tax return & realise what is going to / has changed
            & as Eri points out, those that think there is a low demand for their property & dont want a vacancy may not increase at all, or will wait for high demand time - Feb - March
            Personally I'm in that boat for my longer term existing tenants - will wait a bit until theres good demand- unless theres a change-over in tenants in the meantime, at which point the rent goes UP.

            Theres 300,000 landlords - thats a lot of different responses.
            maybe only 50 - 60,000 could be classed as Professional landlords, the rest are mom & pop with 1 property they manage themselves, or have a couple that are managed by a PM
            Last edited by Keithw; 07-07-2010, 04:20 PM.
            Food.Gems.ILS

            Comment


            • #7
              I believe the majority of private LL's only own one property (something like 80%? of privately owned properties).

              I know of circumstances where LL's haven't put up the rent for nine years!!, they don't feel like they could raise the rents with their tenants - whom they're now "friends" with.

              So instead of raising the rents - they sell. Figure that out

              In this group of LL's there are also those who consistently under-rent their property every time it becomes empty, either through "niceness" or ignorance of the true market rent.

              Not all LL's are professional LL's. Some are Accidental LL's, some are inheritance LL's and some are just plain incompetent.
              Patience is a virtue.

              Comment


              • #8
                Something to remember about the DBH statistics is that they are the figures for a six month period. The latest ones from jan to June. Also they usually only represent changes in tenancy not increases in existing rents. As such they probably represent well below half of all rentals. (Giving a one year average rental period)
                If you watch trademe for your area and compare with the DBH there will be a difference. As the DBH figures lag severely because of the time period they are collected over. Currently I believe that for two bedroom flats in my area of Wellington they are at least 10 dollars behind. In my view the DBH figures at the moment are a good guide to the minimum rent possible. However in times of stable rent they are a very good guide and compare well with other sources.
                Doug

                Comment


                • #9
                  I think a lot of the newer rental property coming on stream is small and lower quality than the existing stock. As an example Soho in Wellington was recently completed and ~326 shoebox apartments came to the market in one hit, with 1br's going for under $300pw and 2br's going for under $400pw. In reality rents on existing properties could well be going up, but the sheer number of lower value rentals being let could well drag the median rents into negative territory.

                  I wonder if (or when) someone will start recording rent received per m2 of apartment, as I think that would provide a much better indication. A 2br apartment could have a market rent of anything between $300pw and $1000pw, so there is a lot of room for errors.

                  Originally posted by Re@der View Post
                  Currently I believe that for two bedroom flats in my area of Wellington they are at least 10 dollars behind. In my view the DBH figures at the moment are a good guide to the minimum rent possible.

                  Comment


                  • #10
                    that was certainly what happened in ak central

                    don't think any of the conrad buildings have been able to average above $400 for 2beds
                    have you defeated them?
                    your demons

                    Comment


                    • #11
                      Originally posted by spurner View Post
                      I think a lot of the newer rental property coming on stream is small and lower quality than the existing stock. As an example Soho in Wellington was recently completed and ~326 shoebox apartments came to the market in one hit, with 1br's going for under $300pw and 2br's going for under $400pw. In reality rents on existing properties could well be going up, but the sheer number of lower value rentals being let could well drag the median rents into negative territory.
                      The problem is it generates noise and expectations.

                      See this article from today's local rag.

                      Wellington apartment market close to free fall

                      In this story they say how the market is about to collapse and rents are dropping. They then say how the blonde sitting on the window ledge is paying $160 a week for her room in a 5 bedroom apartment. Do the maths, that's $800 per week and she's only in a fringe location.

                      Comment


                      • #12
                        I guess like everything Rents will go up. Best to be collecting it and not paying it.

                        Comment


                        • #13
                          deflation

                          the meek really will inherit the earth

                          by making every $ go further

                          depositors win win win

                          debtors die of a thousand cuts

                          which is why the govs. of the world are trying so hard to learn from the japanese experience

                          not that successfully at the moment

                          but they ARE trying
                          Last edited by eri; 15-07-2010, 02:05 PM.
                          have you defeated them?
                          your demons

                          Comment


                          • #14
                            Japan’s gross debt is 215 percent of its gross domestic product, according to the IMF, which forecasts growth of 2.4 percent this year and 1.8 percent next year in the world’s second-largest economy.


                            I wonder what NZ's gross debt is?
                            "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

                            Comment


                            • #15
                              nowhere near as bad

                              no one's is

                              not even greece

                              but japanese gov debt is basically owed to japanese

                              so in theory the gov. can just tax it all back off it's citizens

                              however the citizens are aware of this trick

                              and savage any gov. at the polls who dares to discuss raising taxes

                              death spiral

                              ie all a normal part of japanese progress

                              meanwhile in nz

                              the gov debt is not so bad

                              it's the citizens who owe the foreigners/banks

                              and they will reward a gov who says they don't have to pay it back
                              have you defeated them?
                              your demons

                              Comment

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