Propertyscouts Auckland

Rents Increasing - The Perfect storm. - 29th Nov 2017

It isn't looking good for the 42 per cent of New Zealanders who rent as massive rental hikes are on their way.

A report by Property Institute shows one- to two-bedroom properties in Wellington have increased by 28.8 per cent in the last 12 months.

One- to two-bedroom Hamilton have also increased by over 30 per cent in the last 12 months.

Property Institute chief executive Ashley Church says the problem is a "perfect storm" of high migration, a shortage of rental housing stock and lack of investment in property.

"While it's normal to see rent increases in the period following a property boom - these ones will be made worse as a result of the combined effect of unusually high inward migration and loan to value restrictions which have closed investors out of the market."

He also pointed to a potential capital gains tax and significant compliance costs.

"It's all leading to a perfect storm of circumstances and means that we're in for big rent increases in some parts of the country over the next couple of years".

Mr Church said there were claims that rental stock had fallen as much as 35 per cent in Auckland in the last year.

The report shows that the median sale price of a house remained unchanged over the past 12 months at $483,000.

Earlier this month, Trade Me also said they were predicting rents to go through the roof, particularly in Wellington.

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