Hello,
Welcome to the thirtieth edition of the West Auckland monthly Residential Landlords Newsletter.
I am a landlord myself and have been for over 30 years. I currently own rental properties in South Auckland, the North Shore and of course West Auckland. Being a high preforming Real Estate Agent (top 1% in New Zealand) for over 26 years and always working in West Auckland I know the real estate market and the rental market very well.
In this and future newsletters I hope to provide ongoing up to date information relevant to landlords who own rental properties in West Auckland.
Regular features will include:
- Current sale prices
- Current mortgage rates
- Current rents
- A monthly suburb spotlight review
- A relevant feature article each month
|
Sale Prices |
|||
| Suburb |
Median selling price |
No sold | Days to sell |
| Titirangi |
$912,500 |
16 |
36 |
| Sunnyvale |
$620,000 |
9 |
31 |
| West Harbour |
$939,000 |
9 |
40 |
| Hobsonville |
$958,000 |
14 |
62 |
| Glendene |
$695,000 |
6 |
41 |
| Henderson |
$793,000 |
38 |
31 |
| Massey |
$719,000 |
32 |
32 |
| Ranui |
$662,450 |
13 |
30 |
| Swanson |
$730,000 |
5 |
38 |
| Te Atatu Peninsula |
$935,000 |
10 |
48 |
| Te Atatu South |
$890,000 |
13 |
44 |
| Glen Eden |
$745,000 |
26 |
32 |
| Kelston |
$640,000 |
4 |
31 |
| New Lynn |
$685,000 |
18 |
33 |
Source REINZ
|
Current Mortgage Rates (17/01/2017) |
|||||
|
Float |
1 yr fixed |
2 yr fixed |
3 yr fixed |
5 yr fixed |
|
| ANZ |
5.79% |
4.49% |
4.85% |
5.59% |
6.09% |
| ASB |
5.80% |
4.45% |
4.74% |
5.49% |
5.69% |
| BNZ |
5.90% |
4.59% |
4.79% |
5.09% |
6.09% |
| Westpac |
5.84% |
4.59% |
4.85% |
5.09% |
5.84% |
| Kiwi Bank |
5.70% |
4.69% |
4.79% |
5.25% |
5.75% |
| Best of other lenders |
5.00% |
4.09% |
4.29% |
4.89% |
5.59% |
Source – J Goodrum – Internet search
| Current Rents | |||||
| 1st Nov 2016 – 30th Apr 2017 | |||||
| Glen Eden | Average Rent | Bonds Paid | Royal Heights/Massey | ||
| 2 brm flat | $385.00 | 14 | 1 brm flat | $280.00 | 14 |
| 2 brm house | $380.00 | 27 | 2 brm flat | $380.00 | 9 |
| 3 brm house | $480.00 | 106 | 3 brm flat | $457.00 | 12 |
| 4 brm house | $580.00 | 16 | 2 brm house | $420.00 | 27 |
| Glendene | 3 brm house | $480.00 | 143 | ||
| 2 brm flat | $380.00 | 11 | 4 brm house | $590.00 | 37 |
| 2 brm house | $400.00 | 28 | 5+ brm house | $685.00 | 12 |
| 3 brm house | $485.00 | 69 | Te Atatu South | ||
| 4 brm house | $557.00 | 18 | 1 brm flat | $295.00 | 6 |
| Henderson | 2 brm flat | $405.00 | 12 | ||
| 1 brm apartment | $330.00 | 7 | 2 brm house | $420.00 | 19 |
| 1 brm flat | $310.00 | 27 | 3 brm house | $500.00 | 58 |
| 2 brm flat | $390.00 | 45 | 4 brm house | $587.00 | 12 |
| 3 brm flat | $435.00 | 14 | 5+ brm house | $770.00 | 5 |
| 1 brm house | $335.00 | 16 | Te Atatu Peninsula | ||
| 2 brm house | $420.00 | 64 | 2 brm flat | $380.00 | 13 |
| 3 brm house | $490.00 | 239 | 1 brm house | $320.00 | 5 |
| 4 brm house | $580.00 | 82 | 2 brm house | $412.00 | 18 |
| 5+ brm house | $700.00 | 33 | 3 brm house | $525.00 | 99 |
| Kelston | 4 brm house | $680.00 | 20 | ||
| 1 brm apartment | $320.00 | 13 | 5+ brm house | $650.00 | 5 |
| 1 brm flat | $295.00 | 13 | Titirangi | ||
| 2 brm flat | $368.00 | 22 | 1 brm flat | $330.00 | 17 |
| 3 brm flat | $450.00 | 9 | 2 brm flat | $390.00 | 9 |
| 2 brm house | $400.00 | 27 | 2 brm house | $407.00 | 30 |
| 3 brm house | $492.00 | 74 | 3 brm house | $512.00 | 78 |
| 4 brm house | $600.00 | 15 | 4 brm house | $580.00 | 19 |
| New Lynn | West Harbour | ||||
| 1 brm apartment | $350.00 | 21 | 2 brm apartment | $525.00 | 9 |
| 2 brm apartment | $420.00 | 17 | 1 brm flat | $315.00 | 6 |
| 1 brm flat | $340.00 | 13 | 2 brm flat | $400.00 | 6 |
| 2 brm flat | $390.00 | 42 | 3 brm flat | $515.00 | 6 |
| 3 brm flat | $485.00 | 14 | 1 brm house | $315.00 | 6 |
| 2 brm house | $430.00 | 46 | 2 brm house | $460.00 | 28 |
| 3 brm house | $500.00 | 100 | 3 brm house | $550.00 | 107 |
| 4 brm house | $600.00 | 26 | 4 brm house | $700.00 | 54 |
| 5+ brm house | $695.00 | 6 | 5+ brm house | $770.00 | 18 |
| Ranui | Western Beaches / Rural | ||||
| 2 brm flat | $380.00 | 6 | 1 brm flat | $300.00 | 7 |
| 3 brm flat | $440.00 | 6 | 2 brm flat | $405.00 | 6 |
| 2 brm house | $390.00 | 14 | 2 brm house | $405.00 | 29 |
| 3 brm house | $450.00 | 85 | 3 brm house | $500.00 | 52 |
| 4 brm house | $575.00 | 10 | 4 brm house | $610.00 | 21 |
| 5+ brm house | $745.00 | 6 | |||
Source NZ Government building & housing
|
|||
|
Henderson |
|||
|
Date |
Median selling price |
5 year gain % |
|
| Apr 1997 | $188,000.00 |
- |
|
| Apr 2002 | $176,500.00 |
- 6.1% |
|
| Apr 2007 | $357,000.00 |
+ 102.3% |
|
| Apr 2012 | $407,500.00 |
+ 14.2% |
|
| Apr 2017 | $793,550.00 |
+ 94.7% |
|
| Over 20 years |
+ 322.1% |
||
|
|||
|
Te Atatu Peninsula |
|||
|
Date |
Median selling price |
5 year gain % |
|
| Apr 1997 |
$199,500.00 |
- |
|
| Apr 2002 |
$191,750.00 |
- 3.9% |
|
| Apr 2007 |
$485,000.00 |
+ 152.9% |
|
| Apr 2012 |
$465,000.00 |
- 4.1% |
|
| Apr 2017 |
$935,000.00 |
+ 101.1% |
|
| Over 20 years |
+ 368.7% |
||
Source NZ department of statistics
So what is the future for the rental market in New Zealand?
I believe it is very bright for landlords. It is expected to continue to grow. Even if the percentage of people renting (33% in 2016) stayed the same, the growth in the number of houses would mean that the number of rental properties will grow.
It is likely however, that the percentage of people renting will also continue to increase as it has for the past 25 years. The reasons are the shortage of houses in Auckland, which will for some years yet not be eliminated and mean prices will continue to rise, meaning less people will be able to afford to buy.
Rents are likely to increase as house prices increase but rent rises usually lag behind house price rises. Remember also that as house prices rise it is not certain that rents will rise.
In the UK for example, in London there is a shortage of houses and prices are rising, yet rents are falling slightly. Brexit perhaps? The political scene can have a significant effect. The general election this year could change things dramatically.
The New Zealand House Rental Market – Past, Present and Future
The peak of home ownership in New Zealand was in 1986, when 76% of New Zealander’s owned their own home. That meant that 24% were renting. The ownership rate declined in the 1990’s and has continued to fall ever since.
The main reasons for the growing numbers of rentals is the rising prices of houses. In West Auckland, the median house price in 1992 was $112,000. Today it is $760,000. That is a 578.6% increase in 25 years or 23% straight line increase each year. For many over the years, as today, house purchase is not affordable.
Today in New Zealand, 33% or 1 in every 3 houses in rented. Is that a bad thing? Well, it is not a sign of a poor economy. After all, the New Zealand economy is one of the best performing in the OECD (Organisation for Economic Co-Operation and Development countries) which include much of the European Union, USA, Japan, Korea, Australia and Canada.
Also, it is interesting to note that one of the poorest performing economies in Europe – Spain, has the highest owner occupancy rates at 83.2% (16.8% rentals) and the best performing European economy is Germany, which has the lowest owner occupancy at 43% meaning 57% of Germans rent their house.
If you would like to discuss your rental property situation please call me for a confidential discussion.
Until next time,
Best wishes,
John Goodrum
Licensee Agent REAA 2008
021945140
09 838 8895