Wellington Property Investors' Association

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wellington@nzpif.org.nz

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22-11-2007

6% pa rental increases predicted

A report from Westpac has predicted stagnant house prices but large increases in rental prices. Click here to view a full version of the Westpac report.

Radio New Zealand reported on the announcement:

Westpac Bank is forecasting rents to increase by as much as 30% over the next five years.

Annual growth in rental prices is currently around 3%, but Westpac economists pick that will double within a year, and stay at 6% for five years.

Westpac economist Dominick Stephens says subdued capital gains, high mortgage rates and low rental yields are a "classic formula" for higher prices.

Andrew King of the Property Investors' Federation told Morning Report that investors who manage their own costs well won't need to increase charges so much.

But David Zussman of the Monte Cecilia Housing Trust told the programme low-income families are already having to pay quite high rents, and this is leading to overcrowding.

Radio New Zealand

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