Hawke's Bay rents rocket up $57 a week in a year
Costs of renting property in Hawke’s Bay have gone up $57 a week since last year and renters will have to add another $10 a-week on top of that next month.
Data from the Ministry of Business, Innovation and Employment shows that last month the average mean rent in Hawke’s Bay rose from $338 a week, last October, to $395 a week.
That was a rise of 16.8 per cent and makes the costs of renting, on average, about $1700 a month.
However, Kiwibank economist Jeremy Couchman said that was still below the average $2000 a month needed to service a mortgage based on the region’s median house price ($464,000) and a deposit of 20 per cent.
Rental company Oxygen pointed out that one-bedroom properties in Napier Central have increased by 48 per cent compared with October 2017. The average rent is now $350 per week.
However, two-bedroom properties in Napier Central saw a much smaller increase of 22 per cent compared with October 2017. The median rent is now $390 per week.
Two-bedroom properties in both Hastings and Napier South saw an increase of 17 per cent compared with October 2017. The median rent is now $340 and $315 respectively.
NZ Property Investors Federation’s Hawke’s Bay-based president Sharon Cullwick said renters could expect another $10 a week on top of current costs, once the government scrapped up-front letting fees from next month, as rental agencies were likely to introduce a weekly administration fee instead.
“Private landlords that look after their own property, that won’t affect renters, but the people that rent through an agency will end up paying an extra $10 a week, which actually works out they will end up paying more in the long run – if they stay there longer, and we already know they are.”
Cullwick said it was a good idea to abolish letting fees but pointed out it would not help tenants.
The main reason for higher rents in Hawke’s Bay were big increases in property insurance, she said.
Additionally, MBIE records also show fewer people entering the rental market. Only 239 new rental bonds were lodged last month – down 128 on the same month last year.
“What we’ve found is there is huge demand for rental properties,” Cullwick added.
“We had a meeting last night, with about 40 people, and the average would be five properties that everyone in that room would have – and one person had a room for rent.
“We are finding that the tenants are not moving because they know there is nowhere else to go. The other thing too, we have noticed, is that tenants are paying their rent and everything on time because they know if they move out they cannot find another house to rent – there is just nothing available to rent.”
Tremains Rentals general manager Ruth Shannon said there had been a shortage of rental listings available in Hawke’s Bay for some time, which enabled landlords to achieve premium rents.
“Currently there are only 83 rentals available on Trade Me across Hawke’s Bay. We are seeing a mixed bag, some investors are selling up before the new round of proposed legislation is rolled out and other investors are still actively buying and adding to their portfolios.
“As long as property is viewed as a solid investment then there will always be a need for property management companies, more so when new legislation and compliance is introduced.
“It will just get too hard for private landlords to keep up with tenancy law and the legal requirements.”
