Cost of renting set to soar - report

  • 29/11/2017

It isn't looking good for the 42 percent of New Zealanders who rent, with massive rental hikes predicted to be on their way.

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

One- to two-bedroom Hamilton homes have also increased by over 30 percent 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 explained.

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 percent 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, TradeMe also said they were predicting rents to go through the roof, particularly in Wellington.

NZN