Source: MIL-OSI Submissions
Recent events are clearly starting to take a toll on property rents in Queenstown, which have fallen by 10% since the same time last year. There are also a few other pockets of weakness across the country, although so far most areas have seen rents hold up pretty well. The absence of tourists and the prospect of further job losses suggest that the risks to rents over the next 6-12 months are to the downside, but at least property investors can benefit from super-low mortgage rates.
The rental side of the property market has been in the news quite a bit over the past 1-2 weeks, especially Queenstown, where rents have clearly begun to fall. This Pulse takes a closer look at the figures and highlights how rental falls are not just contained to previous tourist hotspots, but also that other parts of the country are still seeing strong rental increases.
Indeed, according to MBIE’s data (based on bonds lodged), average rents for NZ as a whole were 4.8% higher in the three months to June than the previous year – that’s despite lockdown kicking in pretty much at the start of that three month period. The data showed a decline of 10% for Queenstown, as well as falls in other areas such as Masterton, Westland, and Waimakariri (see the first chart). But at the same time, many other areas are still buoyant, including Lower Hutt, Gisborne, and Dunedin. Interestingly, Southland District (which includes tourist areas such as Te Anau) has seen rents continue to rise too.