Rental pressures ease in most centres
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Christchurch remained a hot spot for landlords last month, but rental pressures are weaker across the rest of the country.
Ministry of Business, Innovation and Employment figures show that average weekly rents in March rose nearly 4 per cent to $361 on the same month last year, although they eased slightly on the previous month.
Housing shortages saw Christchurch weekly rents soar 10.1 per cent to $379 over the year.
Net migration in the city was at its highest levels since 2006, and demand for accommodation showed no sign of abating, the ministry said.
Martin Evans, the Christchurch-based president of the Independent Property Managers Association, said the figures were probably conservative.
"The average rental in Christchurch would be more than that, but that's been pulled up by demand for furnished houses and short-term rentals which we haven't had before."
Those most affected were on low incomes, he said. "They are the ones struggling to pay the increased rents."
Outside Christchurch, rental growth was more modest.
Auckland rents rose 2.8 per cent to $445 on March last year, a trend backed by recent Trade Me figures that showed rents were flat and there was a large rise in supply.
Wellington rents firmed by 3.2 per cent to $442.
In Hamilton, rents showed growth of 6.5 per cent to $317.
Guardian First's Wellington letting manager, Fiona Greup, said a lot of rentals traditionally hit the market in summer, increasing supply.
"A lot of landlords choose to let their leases end between January and March," she said.
Commentators say the country has had a surplus of rental properties nationally since investors plunged into rental properties between 2003 and 2007.
Economist Gareth Kiernan, of Infometrics, said it was clear rental property was no longer the best-performing investment.
Gross rental yields were running at 4.65 a year, which was being outclassed by house prices and the sharemarket.
"Once we got through that initial price correction in the property market, even if you weren't getting much of an income return on your rental property, it was OK compared to other alternatives," he said.
"Whereas now I think there are other options starting to emerge as economic prospects emerge."
The ministry's figures show rent rises varied widely when it came to property size.
Rents for three-bedroom properties were up 2 per cent ($372), while one-bedroom properties jumped 6 per cent ($255).
The monthly figures are based on new bonds lodged over the past six months.