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Rent still through the roof

The past three years of the pandemic saw a boom in city workers traversing the hill from Wellington to Wairarapa for cheaper, simpler living in the country.

But online data on average household income and rental affordability suggests living and working outside the city still comes at a cost for many who still rely on renting.

The mean household income in Masterton for 2022 was $91,935, according to economic consultancy Infometrics NZ.

Average household rent was $380 in 2021 and rose to $431 in 2022 – a jump of 12.6 per cent in just one year.

These same households had a rental affordability index of 24.4 per cent, compared to Wellington City at 19.2 per cent.

The rental affordability index shows the percentage of average household income needed to cover average weekly rent, with a bigger percentage indicating lower rental affordability.

Carterton showed an even bigger increase in average rent costs, going from $378 in 2021 to $438 in 2022 – a jump of 14.7 per cent.

Data for South Wairarapa District was unavailable.

Wellington’s average weekly rent for 2022 sat at about $582, but the average household income was also significantly higher at $157,677.

Infometrics chief executive and principal economist Brad Olsen said the consultancy’s analysis showed rental growth in Masterton had remained at a higher rate of nearly 11 per cent on average over the last year.

“In general, Wairarapa rents continue to grow at an elevated rate, reflecting a higher demand for the lifestyle options available in the region, and still limited supply.”

Property Brokers general manager David Faulkner said there’s been a rise in rent prices of about 20 per cent over the past 18 months.

“That’s a really big amount when you compare it to Wellington or Auckland, or other bigger cities,” he said.

“It’s a trend that has been replicated not just in Wairarapa but in other regions as well, like Horowhenua.”

Faulkner said the latest tenancy tribunal data estimated tribunal applications had increased nearly 50 per cent in the first quarter of 2023, compared to one year ago.

“That indicates there is a big squeeze on tenants, and that it’s difficult and tough.

“We foresee there’s a real bite going into people’s incomes, and if unemployment starts to become an issue, then it’s only going to get worse.”

Faulkner noted there are factors driving rent increases outside landlords’ control, including compliance costs, and the recent law change on interest deductibility, meaning landlords can no longer offset interest payments against income.

“It adds a substantial cost. It could be costing a rental property an extra $50 a week for the landlord, and they’re either going to try and recover that or sell the property.

“It’s become a cost-of-living crisis mixed in with a housing crisis,” Faulkner said.

“We want to see balance in the market – it’s better for us if we’ve got landlords and long-term properties providing rents that tenants can afford.”

Community Budget Services Wairarapa spokesperson Heather Smith said rent increases had been minimal for clients in community housing, but those in private rentals were having to juggle finances to cover extra costs.

“WINZ does help with the accommodation allowance for beneficiaries, but this doesn’t always cover the extra costs.”

Smith said finding suitable, affordable housing could be extremely difficult.

“I personally find the rents in Wairarapa over the top.”

Bella Cleary
Bella Cleary
Bella Cleary is a reporter at the Wairarapa Times-Age, originally hailing from Wellington. She is interested in social issues and writes about the local arts and culture scene.

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