Rent Changes Depend on Suburb

The rents for some suburbs change over time at different rates to the National rental levels. As I have shown before, rents tend to stay in a tightpercentage of incomerange over long periods of time (20 years or more).

I had a look at a range of suburbs in Wellington (my home town) and found some interesting trends between suburbs. To show the trends I have included two charts showing the details by month over 20 years, plus one to show how big the changes are in percentage terms. Check the detailed shape of the curves, suburbs respond to desirability changes differently.

This chart shows some interesting trends, eg

  • Petone normally sits close to the national average, however it lagged for a few years before catching up again - 2015 would have been a great time to invest.
  • Seatoun is dominated by Weta rentals and appears to have risen faster than national rents up to the GFC (or was that the end of LoR production?), however it is not looking good for investment now.
  • Khandallah was the most expensive suburb, but while accelerating to a peak when the GFC broke, has now fallen well behind although may but been an excellent investment in 2011 or 2013.
  • Taita, a low decile area, dropped below the national average over the entire period, getting very low in 2013 and 2017.

To see what the net changes are, we need to look at these changes in percentage terms:

This chart compares the Suburb:National rent ratio from June 1993 to September 2018, 25 years later for a small selection of times.

As you can see Khandallah would not have been a good investment, it has dropped 28% (71% to 43%) compared to the national average over the 25 years. However hidden in the trend chart, Eastbourne and Island Bay have performed extremely well, both rising 8%. Seatoun would still have been the best, but only if you had seen Weta coming. Investing in low decile areas does not look great from these stats, with rentals either trailing or struggling to keep up with the national average, eg Taita lost 22%


Jonette 2011