Rents are falling throughout many Auckland suburbs according to the latest figures from the Real Estate Institute and Tenancy Services Bond Centre.
The falls are being attributed to an oversupply of properties and the rush of investors into residential property since the boom started in 2001.
The biggest decline was a 23 per cent drop for four-bedroom places in Takapuna/Milford, rented last February for $652/week, but now going for $500.
Next biggest decline was a 20 per cent drop for four-bedroom Sandringham properties, rented at $475/week last February, but now at $380.
Rents for one-bedroom places were down 13 per cent in Ponsonby/St Marys Bay/Herne Bay, 13 per cent in Birkenhead/Northcote Pt and 11 per cent in Remuera.
Rents are up in some suburbs, such as Epsom, which showed a 17 per cent price increase for four-bedroom places, which rented last year for $600/week and are now fetching $700/week.
Rents for low-quality one-bedroom inner-city apartments let to students have fallen by around $40 a week. In October last year, the average one-bedroom Auckland city apartment rented for $290 compared with $330 15 months earlier.
A spokeswoman for Auckland property management specialist Crockers said luxury housing, going for between $2000 and $3000 a week, had become the hardest to let.
But many other properties were hard to rent and tenants were more selective.
"It's a tenants' market and the supply is exceeding the demand," she said.
Crockers manages thousands of Auckland residential properties and she said low-quality inner-city studio apartments were some of the hardest to rent. Auckland has about 11,000 inner-city units, but the stock is about to double.
Apartments in the Viaduct Pt area - The Parc, The Point and Viaduct Pt - were in demand. So were units in Quay West on Albert St and the Metropolis high-rise tower on Albert Park, and Crockers had a waiting list of tenants for units in these developments.
"The areas of higher capital gains like Remuera and Takapuna had more fluctuations in rents, but the lower-priced areas had more stable rents," she said.
Two bank economists last week predicted a fall in housing prices soon. Bank of New Zealand chief economist Tony Alexander said prices would be down 10 per cent within three years and Westpac economist Donna Purdue said they would drop 5 per cent this year.
Alexander advised first-home buyers to delay buying and rent because they would do better if they delayed any property purchases.
Any downturn in home loans would have an impact on the banks. BNZ has $16.2 billion loaned in housing mortgages, Westpac $19.4 billion, ANZ National Bank $34.8 billion and ASB $22.8 billion.
The Economist magazine this month published countries where house prices were at a record high ratio to rents, listing the United States, Britain, Australia, New Zealand, France, Spain, the Netherlands, Ireland and Belgium.
To bring equilibrium back to these countries' real estate, either rents must rise sharply or house prices must fall, it said.
Latest Real Estate Institute sales figures showed prices climbing. The national median selling price increased from $265,000 in January to $269,200 last month.
Falling rents
Four bedrooms
Takapuna/Milford Down 23 per cent
Sandringham Down 20 per cent
One bedroom Ponsonby/St Marys Bay/Herne BayDown 13 per cent
Birkenhead/Northcote PointDown 13 per cent
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