Rents fall for first time sine 2009
Photo:
RNZ
Rents have fallen on an annual basis for the first time since late 2009, property research firm Cotality says.
Its latest data points to an update from the Ministry of Business, Innovation and Employment, which showed national median rents in the three months to May were down 0.3 percent from the year before.
It follows reports of
drops in the price being asked for advertised rental properties
.
Cotality chief economist Kelvin Davidson said it was a notable change after big rental increases between 2021 and 2023.
"I think it's quite significant. There aren't many periods in the past where rents have fallen. The latest numbers are only down slightly but you have to go back to 2009 to find a period where annual rental growth on these numbers has been negative and before that it was the late 1990s. So around the Asian financial crisis and the GFC."
He said it showed a shift in the market.
Auckland and Wellington had experienced bigger drops. Auckland's rents were down almost 2 percent year-on-year.
Dunedin experienced strong rental growth, up almost 10 percent. Hamilton's were also up, but only about 4 percent.
"I'm not saying it's easy to be a tenant by any means but the growth rate has petered out. That's consistent with the fact that rents are already high. That's a natural handbrake on any further growth, as well as migration coming down to reduce the marginal extra demand for property. And of course more listings on the market too."
He said a change in the composition of the rental market, with more, smaller, properties coming on to the market could have influenced the drop but would not be the full story.
Davidson said it should not be expected that rents were going to decline steadily for a long period of time.
"What's more likely is that you get a long flat patch and that's how the rental market tends to adjust, the rents go flat for a while and affordability is improved by incomes going up.
"Of course the flipside is for landlords there's going to be continued challenges in terms of getting rental increases through if that's what they're looking to do."
The data showed house price values nationwide increased 0.2 percent in June but were down 0.1 percent over three months,
In the 12 months to June, 85,951 properties changed hands.
The average gross rental yield now stand at 3.8 percent, which is the highest level since mid-2016. This measures rental income as a proportion of the value of property.
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