Higher rents in Central Auckland

Lots of new subscribers this week, many from Auckland, as expected, but a good number from Hawkes Bay, so expect an update about HB soon.

Having looked at quarterlyNZ wide rents as a proportion of weekly household income I decided to take a compare at the Territorial Authority (TA) level of Auckland. Unfortunately Stats do not supply incomes split to this level - yet, so I have to use all-of-Auckland incomes.

People tend to be limited in their choice of the rental they pay based on the income they have, so the percentages have stayed relatively constant over the last 20 years. There may be some recent reductions, maybe as transport costs have reduced, but only after increases in the mids 2000s. The TAs can be divided into three groups based on the distance out from the central city - although North Shore is clearly seen as part of the central city for rents now.

Rents based on MBIE Quarterly Detailed Mean Rents by TA (from active bonds) and Average household income from Stats Dept, including income from wages and salaries, self-employment and government transfers.

Note that there are some sudden changes, which I think are a direct result of “interesting" data from Stats on HH incomes, see especially the 2015-2016 change, that is really due to a big increase in incomes over that period, which may have occurred but I suspect one of the data points was out a bit.

However the trend is now down.

Listings by Bonds

MBIE publish the number of Active Bonds, this is the number of rentals with a bond registered by MBIE at any one time. The data is monthly.

I have taken the first measure of listings each month and compared them to the number of bonds in that month. this provides a simple line chart that compares the state of the market in each region in a helpful way. (This can be extended to more regions if required)

International research on the state of equilibrium, ie when demand is equal to supply is normally reached at 3%. This will depend on turnover in any area, so is not necessarily the best comparison.

It is quite clear that Auckland is very much in a state of equilibrium and has been since 2014/15, a point frequently obvious in many other charts I produce. Canterbury has come to the end of the earthquake effect by all appearances, but stability is yet to show. On the other hand Wellington, Waikato and Bay of Plenty are very short of rentals at 2% or less, we also know that from other data.

Jonette 2011