Interactive: Who’s paying the highest rent in NZ?

Auckland edges Wellington as the most expensive city in New Zealand for tenants – but rents in the capital have risen more in real terms since 2000.

The trends are visible in a Herald interactive graphic, which uses official Government data adjusted for inflation to track 21 years of rent increases in our two most expensive cities.

In early 2000, Auckland’s average residential rent was $250 per week, according to figures from Tenancy Services, part of the Ministry of Business, Innovation and Employment. Adjusted for inflation, this comes to $388 per week in 2021 dollars.

Today Auckland’s average residential rent is $564 per week, which represents a 45 per cent increase in real terms.

The average Wellington region rent was $235 per week at the start of the millennium, which amounts to $338 per week in 2021 dollars.

Today it has risen to $517 per week, a 53 per cent increase in real terms.

You can follow all the changes on the interactive graphic below, which gives an overview of how rents have increased in Auckland and Wellington.

The interactive shows the most expensive rental suburbs in yellow ($500–$600/week), orange ($600–$700/week) and red (over $700/week). All prices are adjusted for inflation to 2021 dollars.

Around 2000, few Auckland suburbs cross the $500/week line but from 2003, rises become obvious in the lower North Shore areas of Takapuna, Hauraki and Belmont and isthmus areas of Remuera, St Johns and St Heliers.

By 2007, the darkening colours take on a crescent shape from Parnell through to Newmarket as rents for houses and flats in these areas hit the $500-$700/week mark.

In 2013, the orange and red spread further from the southern East Coast Bays area down to Belmont, across to Mt Albert and Pt Chevalier. All areas of the waterfront and inner-city suburbs are now dominated by the deeper orange/red, illustrating rent rises.

Come 2015, rents in the northwest really take off, with new housing and motorway improvements but tenants in all areas around the Manukau Harbour are also paying more.

By 2018, the inner-city areas and most of the isthmus except industrial areas around Penrose and Panmure are in the $500/week range.

Much the same pattern is reflected in the same 21 years throughout Wellington, as we see rents higher around the inner city but then spread up to the Hutt Valley and Eastbourne areas, across to the Miramar Peninsula, up to Porirua and Tawa.

Red (highest rents) now show up from Churton Park in the north to the south’s Breaker Bay, from Karori and straddling the popular waterfront areas from the CBD around the winding coast to Hātaitai.

Renters United organiser Robert Whitaker said he was “unfortunately not surprised at all” by the Herald’s rent rise data.

“It’s getting more expensive and we’re now seeing it spreading to Tauranga, Hamilton and elsewhere. We need much greater Government intervention on the supply side and to protect tenants via rent control.”

Renters United says more than a third of New Zealanders are tenants but successive governments have turned a blind eye as rents have climbed higher and higher, outstripping wage growth, especially in Auckland and Wellington.

Unaffordable rents affect all renters, the lobby group says.

“For aspiring homeowners, it diverts income away from saving for a deposit. For those on low incomes, it forces impossible choices between paying the bills, feeding themselves and their family and losing their home.”

Philippa Howden-Chapman, professor of public health at Otago University, is concerned about rising costs.

She says we know already from all too many studies that there is a rapidly growing problem with severe housing deprivation.

She is worried about the number of people whose rent takes more than 50 per cent of their income, who are living in dilapidated, overcrowded conditions or houses where there is no privacy or security of tenure.

On February 11,the Government introduced the biggest reforms to the rental sector in 35 years, severely limiting reasons for eviction and banning rent rises any more than annually. From July, new healthy homes standards will also be fully in force, all resulting in an outcry from landlords who house around 1.3m tenants.

The Greens, like Renters United, want to go further with rent controls, via a new independent agency to determine what a reasonable rent increase will be in different parts of Aotearoa each year.

That agency could factor in inflation, the cost of living, average wage growth, and borrowing costs, barring landlords from raising rents more than an annual limit under the Greens’ regime.

The party says more than four out of 10 people who rent spend 30 per cent or more of their income on weekly payments. Any more than 30 per cent on rent is classed internationally as “unaffordable”.

People who rent generally spend a higher proportion of their income on housing than people who live in a home they own and rental housing is often lower quality, the Greens say.

“Unaffordable rent in cities like Auckland and Wellington is spilling out into other parts of Aotearoa. Rents in Northland, Waikato, Gisborne, Hawke’s Bay, and Marlborough have all hit new highs in 2021.”

When the Government introduced its rental changes to a furious backlash from some property investors and commentators, Greens housing spokesperson Chloe Swarbrick accused landlords of crying “crocodile tears” after a year of amazing capital gains and falling mortgage interest rates.

Andrew King, NZ Property Investors Federation executive director, rejects the claim.

“We were actually fine with most aspects of the changes but had real concerns over some, especially removing 90-day notices,” King said of the February 11 changes.

“The Government didn’t have any research to back up claims that 90-day notices were being abused by landlords. The only facts came from a survey showing that a mere 3 per cent of tenants received a 90-day notice in any given year. The most common reason for these notices was antisocial behaviour that could not be proven at the Tenancy Tribunal,” King said.

Antisocial behaviour creates a bad environment for other tenants and neighbours, often too scared to provide proof that landlords need to evict antisocial tenants, King said.

This change has created genuine concern from landlords, not just for themselves and their property, but for the neighbours of their antisocial tenants.

“Making it harder for landlords to manage their properties increases risk and puts people off wanting to provide rental accommodation. The waiting list for state housing has quadrupled and the Government has to spend $1m/day housing homeless people in motels, showing that there is a rental crisis. Is it sensible to disincentivise landlords who provide around 85 per cent of rental accommodation in New Zealand?” King asked.

King argues that rents are rising because Government decisions have increased the cost and risk of providing rentals. If it wasn’t for lower mortgage interest rates, he says the situation would be even worse.

Note on the graphic The interactive graphic calculates average residential rents using a geometric mean, which multiplies the values and divides by a root based on the number of values. For instance, the geometric mean of 2 and 8 is 4 (2 x 8 = 16/4 = 4).

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