While rental prices around New Zealand are surging, figures suggest Wairarapa may not be experiencing the same level of increases.
National rental growth is pushing at roughly double the long-term growth value, according to the latest data released from CoreLogic yesterday.
The property data and services provider said rental growth hit 6.1 per cent in the 12 months to the end of October, compared to the long-term average growth rate of 3.2 per cent.
However, according to data on new bonds lodged from the Ministry of Business and Innovation, Wairarapa rents were not showing the same steep rise.
Carterton showed the highest growth at 4.6 per cent, Masterton had slightly less at 3.9 per cent, but South Wairarapa had a drastically low growth of just 0.7 per cent.
CoreLogic chief property economist Kelvin Davidson said yesterday that, compared to the rest of New Zealand, Wairarapa’s rents looked a little more restrained.
“It’s hinting that migration or demand isn’t such a big issue there, and supply may be better balanced too.”
According to New Zealand `Tenancy Services, the average median rent in Masterton as at September 30 was $560 a week.
Carterton was not too far behind at $550, and South Wairarapa was also sitting at $560 a week.
Wairarapa Property Investors Association president Tim Horsbrugh said according to the latest CoreLogic figures, local rents had actually softened during the course of this year.
“The Masterton district data rents have not moved over the last four months, and there are reports with some properties showing the rent has been reduced, which is quite good news for tenants,” Horsbrugh said.
“In the Masterton district over this year, rents have moved up 5 per cent from last year, which is less than inflation,” he said.
Reflecting on wider trends, Horsbrugh said a shortage of good rental properties and a high demand were what drove prices up, as well as increasing costs for landlords.
“Who pays for new tax on landlords?” Horsbrugh asked.
“The pressure goes onto tenants. They don’t pay for it all, but they’re having to fork out.”
Using his own rental property as an example, Horsbrugh said he is now paying roughly $2,600 more in tax for his property.
“Divide that into a weekly rent, the extras in my costs – also including increases in rates and insurance – have made it very difficult to be a landlord.”
Horsbrugh said the current conditions meant that fewer landlords were entering the market nationwide.
“If there are not enough houses built, and it’s not cost-effective, who will provide housing for tenants?” Horsbrugh queried.
“We’ve dug ourselves into a serious hole.
“It’s a long-term thing which will take quite a long time to get out of.”
