KEY POINTS:
Residential property investors have finally been given reason to smile this Christmas - rental prices are on the rise for the first time in two years.
Latest statistics from Massey University's real estate analysis unit show that median national weekly rents crept up in the last quarter, from $260 to $265 in August, and to $270 in October and November.
Unit director Professor Bob Hargreaves said prior to September the national median weekly rent had been level at $260 a week since 2004.
The strongest annual increases occurred in the provinces.
Andrew King of the Auckland Property Investors Association said members' profit margins had been squeezed over the last few years.
"The yields on rental properties have dropped by over 30 per cent in the last three years," he said.
In percentage terms, rents increased by 3.8 per cent over the last 12 months, marginally ahead of increases in the consumer price index.
Stronger than expected migration figures and record house prices in the last quarter are behind the rise.
Quotable Value records the average residential sales price now at $347,005.
Over the past 15 years home ownership rates have been declining.
The Centre for Housing Research calculates that owner-occupiers will drop from the current 67 per cent to 62 per cent by 2016 - and to just 58 per cent in Auckland, which will dominate growth in the rental market over the coming decade.
However, the strongest annual rent increases have occurred in the provinces - which have been in "catch-up" mode over the last few years, recording remarkable growth in house prices. Gisborne led the way with rent increases of 24.7 per cent, followed by Palmerston North at 14.2 per cent, Invercargill at 13.3 per cent and New Plymouth at 12.5 per cent.
In Auckland City a glut in one-bedroom apartments means they are recording a small rental decline in contrast to two and three-bedroom apartments where rents went up.
