Comparing rental costs in New Zealand’s largest cities
The rental market in New Zealand continues to face significant challenges, despite a stabilising economy. Rental costs are consuming a record-high portion of household incomes, underscoring the ongoing affordability crisis for many tenants.
Recent data from realestate.co.nz revealed diverging rental price trends among New Zealand’s largest urban areas, illustrating the complex and varied landscape renters currently navigate.
Reductions in Auckland and Wellington
realestate.co.nz data indicated a notable decrease in rental prices in Auckland and Wellington, contrasting with the stability seen in Canterbury.
Over the past year, Wellington experienced the most significant reduction, with average rental prices dropping by 8% to $673 per week, translating to potential annual savings of $3,016 for renters.
Auckland saw a decrease of 4.1%, bringing the average rent down to $689 per week and annual savings of approximately $1,560.
Conversely, Canterbury’s rental prices have barely shifted, decreasing by just 0.4% to $586 per week, offering minimal savings.
Canterbury’s unique position
Despite the general stability in rental prices, Canterbury renters find themselves allocating a higher percentage of their income to rent compared to their counterparts in Auckland and Wellington.
Based on the most recent household income data from Stats NZ, renters in Canterbury spend about 30.6% of their disposable income on rent, slightly above the 30% affordability threshold commonly recommended.
Challenges across the regions
Vanessa Williams (pictured), spokesperson for realestate.co.nz, said that while the drop in average rents might suggest a more tenant-friendly market, the reality for renters, especially those on fixed-term leases, might not reflect these changes immediately.
New renters or those renewing leases stand to benefit most from the current conditions.
Insights on affordability
The notion of spending only 30% of income on housing remains a challenging standard for many Kiwis, according to Frances Cook, finance journalist and host of the Making Cents podcast.
Cook pointed out that for many, housing costs consume far more than the advised limit, often reaching upwards of 50% of their income. However, the recent downtrend in rents offers a glimpse of relief, potentially easing the financial burden for some renters.
