There are two related stories from the NZ Herald today and both are reproduced below. I predicted the rise in rents in these columns nearly two years ago, brought on by the tightening house market and the removal of some depreciation tax breaks that investors used to have. The main reason of course is that there is a general shortage of rentals and no matter how low interest rates go, investors face higher and higher costs besides the lost depreciation e.g insurance premiums. This will become a political issue soon enough along with the related issue of rising house prices. All these are but the hazards of the game.
There is only one way to react: Keep calm and carry on.
Auckland city’s rental prices rocket over past four years
By Alanah Eriksen
Friday Jan 25, 2013
Property management company data shows city renters are paying up to $140 more a week than in 2009.
A Ponsonby resident said he was paying $90 more a week now - $4680 extra a year.
Landlords increased weekly rents for homes of every size in all but two of Auckland’s 30 suburbs, a four-year comparison shows.
Renters in the city are paying up to $140 more a week than they were in 2009, according to the data supplied by Crockers.
The property management company has analysed the number of new bonds received each month – supplied by the Real Estate Institute of New Zealand (REINZ) and the Department of Building and Housing – for one, two, three and four bedroom homes over four years.
The area defined as Ponsonby/Herne Bay/St Marys Bay has remained among the most expensive places to live for all sized houses during the period. Rents for two bedroom homes in the suburb jumped $89 to $521 a week between 2009 and 2012. Three bedrooms jumped $60 to $712 while four jumped $93 to $911.
Takapuna/Milford was the dearest for a one bedroom home at $399, having jumped $58.
Rents rising faster than wages and inflation
By Alanah Eriksen
Increases of more than 9 per cent for rental properties in all 30 Auckland suburbs
Auckland rents are outstripping wages and rising faster than inflation, a four-year comparison shows.
Since 2009, median rent for a two bedroom home has risen 15 per cent in the city, from $333 to $382, and 14 per cent for a three bedroom home, from $438 to $500, according to figures by property management company Crockers.
It was well above the inflation rate of 8.7 per cent for the same period, according to Reserve Bank figures, and higher than Auckland’s median weekly wage rise of 9.7 per cent, from $786 to $863, before tax.
The median income would just service the rent on a three-bedroom home in Ponsonby/Herne Bay/St Marys Bay area, the city’s most expensive suburb at $712 a week.
It would not cover the rent for a four-bedroom home in Ponsonby or Remuera, which costs $911 and $893 respectively.
New Zealand’s median wage of $560, a rise of 4 per cent in four years, would not cover the weekly rent for a three-bedroom