The amount of rent landlords would like to see from a property aren’t in line with what they are getting, according to new insights from Trade Me.
Trade Me says landlords in inner-city Wellington have been asking for a record-breaking $695 per week – but this amount relates only to the rents landlords were asking (hoping) for, and not the actual rent being paid by tenants.
The truth is rents are falling in Wellington, sitting at an average of $595 per week, down 3.7% from the year earlier. This is in spite of landlords asking for a median of $600 for the first time, and even though rent growth typically accelerates over the summer months.
According to a recent article on Stuff, tenants’ rents have flatlined or even fallen in two of our biggest cities, despite landlords often asking for record-high rents online, with CoreLogic stating this appears most prevalent in Wellington and Auckland, with rents increasing in other main centres.
Tony Alexander’s latest survey of property investors reported a record 82% planned to raise their rents this year – the highest number since the survey began in June 2021. The increasing costs involved in being a landlord and providing a rental property are most likely the drivers behind a recent surge in rent expectations or intentions.
When we go through our yearly rent increase programme, we find overall most of our owners are reluctant when it comes to putting up their rents. Still, rising costs, such as mortgage payments, insurance, rates and general maintenance costs have meant many can’t afford not to, which is why our Property Managers suggest smaller increments of $10 or $20 at a time.
After all, it has to meet market rent – the amount a landlord might reasonably expect to receive and a tenant might reasonably expect to pay for a tenancy – and it needs to be comparable to the rent charged for similar properties in similar areas.
While mortgage rates have shot up, it doesn’t mean we can translate that into an excessive rent increase for tenants.
If a landlord is charging a lot more than is being charged for similar properties in your area, tenants can apply to the Tenancy Tribunal and ask for the rent to be reduced. They simply need to evidence that the rent they’re paying is a lot higher than rent for similar properties in the same area.
The market rent calculator can be a valuable tool for landlords to give an indication of what rent is being charged for similar properties in your area. The data is updated monthly and contains actual bond information from the previous 6 months. However, there are multiple factors that determine the market rent of any property, and the data should not be used alone.
