Auckland rents are surging - further bad news for young professionals locked out of the housing market. Figures obtained by the Herald on Sunday show the median weekly rent across the city has risen 14 per cent ($68) since 2012 to $568 for a three-bedroom home last year.
Real Estate Institute of New Zealand (REINZ) figures reveal rents in popular inner-city suburbs are soaring. The most expensive place to rent a three-bedroom home was in Ponsonby, which had a median rent of $807 a week last year, an increase of $95 since 2012.
But even suburbs much further out have seen big leaps in rents. The highest increase for a three-bedroom home was in Manukau-Manurewa, where rents jumped 22 per cent ($82) to $450 in the same period.
The rising rents are another blow for would-be first-home buyers whose ownership dreams have been put on ice due to an almost doubling of Auckland median house values - to $734,021 - in the four years to the end of last year.
Would-be tenants attending open homes in Auckland yesterday voiced their frustration, including four young professionals who checked out a five-bedroom property in Epsom with a weekly rent of $1000.
Vishi Virmani, a 22-year-old brand management consultant, said the group had been looking at between 10 and 15 houses over the past two weeks and they were all expensive.
"It's like $190 [a room] for absolutely terrible places," he said.
"A couple of years ago, when we used to look for flats, for $200 [a room] you get a really nice place."
The group want somewhere close to central Auckland so they are close to work. They have also thought about buying.
"We had a long debate about what you can get for the price, and there's nothing even semi-decent for under a million and we obviously can't afford a million," Virmani, who earns about $1400 a week, said.
"If we could, we'd buy right now. I feel terrible renting because that money's going nowhere."
The group left the open home hoping to get the Epsom flat, but were told it would be difficult because every person who had been through that day had applied.
For Auckland couple Tim and Jenna Glatt, renting was the only option, despite the increasing cost, as they tried to save for a deposit.
Together they earned around $250,000 a year, but the couple were still struggling to rake together the 20 per cent of a property's value necessary for a home deposit.
At the current median price in Auckland this deposit would be around $146,800, well above what the Glatts had in the bank.
So they have decided to rent for a bit longer, paying $750 a week for a 2-bedroom apartment in Freemans Bay, just under the $856.75 weekly mortgage repayments on a 30-year home loan for a median-priced property and a floating interest rate of 5.75 per cent.
Tim Glatt was taken aback by the rising prices.
"It's definitely crazy expensive, particularly compared to what it was before we went overseas five to six years ago.
"Before leaving, the price of a similar place in a similar location was around $250 cheaper."
Renting out of the city would have been cheaper, but the couple had chosen to fork out more for the convenience of being closer to the city for work, he said.
Auckland Property Management director Howard Morely said rents were following a steady increase.
He said the rental "hot spots" were the traditionally popular areas close to good schools or transportation hubs.
"These obviously hold a lot of value."
New Zealand Property Investors Federation executive officer, Andrew King, said from a landlord's point of view the market was in good shape, as there was high demand and rent had risen more than inflation.
"The saving grace [for tenants] is that interest rates have stayed quite low."
But Auckland University Student Association president Will Matthews said for most students the rising costs of rent were putting on emotional and financial pressure.
"What we find is that this [cost] pushes students away from the city and into the suburbs. I know of students who commute from Maraetai and Pukekohe."
He said many students were forced to work long hours while studying full-time to make ends meet, adding to their stress.