Seven regions are becoming less affordable for renters, a new report released on Monday shows.
The Massey University Rental Report, which measures rental affordability on an annual and quarterly basis, shows of 16 New Zealand regions, seven are less affordable than the national average.
Based on data for the June 2021 quarter, those regions are Bay of Plenty, Tasman, Hawke's Bay, Northland, Auckland, Nelson and Gisborne.
Compared to the national average, the Bay of Plenty and Tasman regions are 13 percent less affordable (113 percent, compared to the national average of 100 percent).
Rental affordability in Auckland is 103.3 percent (3 percent less affordable than the national average). At 100.9 percent, Gisborne is only slightly less affordable.
On a national basis, rental affordability declined 9.4 percent year-on-year (1.76 percent over the June quarter) the report shows.
Report authors, Professor Graham Squires and Dr Arshad Javed and from the Massey University Real Estate Analysis Unit, said a number of factors are affecting rent prices in New Zealand.
"These include rising house prices that feed through the housing system towards renters, a shortage of properties, and rising costs for landlords given recent policy changes," Professor Squires said.
The two most affordable regions for renters
According to Massey University's report, the most affordable regions for renters are Southland and the West Coast.
In these regions, rental affordability for the June 2021 quarter comes in below the national average, at 73.5 percent and 65.7 percent respectively.
But Professor Graham Squires said despite the West Coast being one of the most affordable regions, it had the largest quarterly increase in rent prices.
Rent prices in the region were up 12 percent in the June 2021 quarter, to an average rent of $281.
"This still pales in comparison of course to Auckland and Wellington - the most expensive cities to rent accommodation, at an average of $554 and $510 per week respectively," Javed added.
The regions showing the biggest annual rent increases
The five regions showing the biggest annual rent increases (June 2020 to June 2021) were Hawke's Bay (20.4 percent), Bay of Plenty (16.4 percent), Manawatu/Whanganui (14.2 percent), Northland (12.8 percent) and Gisborne (11 percent).
The report measures rental affordability by dividing average weekly wages into mean rents for each region, using data from Statistics New Zealand and the Ministry of Business, Innovation and Employment (MBIE). The data assumes renters live and work in the same region.
