It is the great conundrum of New Zealand's investment scene and the great mystery of the Auckland economy.
Why has the median house price risen 25 per cent in Auckland in the past two years to more than $620,000, yet the median rent for a three-bedroom rental has risen just 6 per cent to $550 a week?
Why have rents not kept up with prices in a market short of housing and facing a migration boom?
The numbers look even more extreme going back to 2007. Auckland's median house price has risen 38 per cent since then, while rents rose just 15 per cent.
Surely the laws of supply and demand say rents should be rising much faster? Rents and prices are rising at similarly high rates in Christchurch, which does face supply shortages and demand from workers receiving higher wages.
Higher house prices mean rental yields have fallen even further below alternative investment options such as term deposits.
These bank deposit interest rates may feel very low at an average of 4.7 per cent before tax, but they are up almost 0.5 per cent since March and above the current implied rental yield before any expenses of 4.6 per cent in Auckland.
Costs have risen, too. Advertised floating mortgage rates are up 0.75 per cent to 6.4 per cent this year, although many rental property investors will have taken advantage of the cheap fixed-mortgage deals being offered by banks able to borrow cheaply offshore and locally.
Auckland's property rates have risen by a cumulative 38 per cent in the first four years of the Auckland Super City and maintenance costs have risen 16 per cent. Tax changes in 2010 also stopped landlords from claiming depreciation on their buildings.
Landlords have taken an enormous dollop of pain over the past couple of years. Therefore there's no shortage of incentives to put up rents.
So why haven't they risen faster? Essentially, rents are limited by the growth of tenant incomes.
Ultimately, rental property investors are choosing not to buy and hold these properties because they provide a regular after-tax yield that is superior to other investments of a similar risk.
They are buying them for the expectation of regular tax-free capital gains that can be earned from a highly leveraged investment.
They are taking advantage of the capital adequacy rules in banking systems globally that incentivise banks to lend against land and buildings. So far that strategy has worked spectacularly well. It has also been affordable in the short term because interest rates have been historically low.
This week the Property Investors Federation even cited IRD figures showing that landlords reported $1.476 billion of taxable profits in the year to March last year, and interest rates were at record lows. It all makes perfect sense while house prices keep rising at 10 per cent-plus a year and interest rates stay below 6 per cent.
A rise in mortgage rates to more than 8 per cent, which the Reserve Bank is forecasting, would break the investment logic behind Auckland rental property, particularly when rents are only rising broadly in line with worker incomes.
The scale of the gap that has opened up between rents and house prices was reinforced this week with the publication by Strategic Risk Analysis' managing director Rodney Dickens of his study of national rents and house prices.
It showed how a close relationship between the two broke in 2002 and they have diverged dramatically since. It has driven house prices 70 per cent above their long-term average relative to rents, making them the highest in the OECD. That measure is a national one, so Auckland's would be more extreme.
So why would Auckland investors double down on property that is at least 70 per cent overvalued when interest rates are rising and rents are not even close to keeping up with rates and maintenance costs, let alone interest costs or any sort of comparable alternative? The simple answer is because they are being given low fixed mortgage rates and because they are second-guessing the predictions.
Property investors have successfully bet that politicians will never impose a capital gains tax, Auckland's Nimby home owners and their captured councillors will never allow significant new housing supply, migration will keep surging and inflation won't rise sharply.
They could be right on all counts. But for how long?