Since January the median rental rose by only $10 per week in Whanganui. Photo / Bevan Conley
Since January the median rental rose by only $10 per week in Whanganui. Photo / Bevan Conley
The cost of rent in Whanganui is plateauing and more rentals are on the market - but that doesn't mean they're more affordable, according to one economist.
Shamubeel Eaqub said that while the Whanganui population had grown by 10 per cent since 2014, the number of rentals had grown byonly 5 per cent, which has driven rents much higher.
"For example, average rents were around 25 per cent lower than Palmerston North in 2014, but are now very similar, at around 5 per cent lower," Eaqub said.
He said this could reduce the desirability of Whanganui as an affordable place to live.
"But it can be managed if housing supply is ramped up, and is deliberately targeted towards lower-income households," he said.
"The big issue is pay, which is around 10 per cent lower than in Palmerston North for example."
Economist Shamubeel Eaqub said the issues surrounding rent could be managed if housing supply was ramped up and deliberately targeted towards lower-income households. Photo / NZME
Valocity data showed the median weekly rental for a standard three-bedroom house in August this year was $490, compared with $450 in August last year.
Since January the median rental rose by only $10 a week, or 2 per cent.
James Wilson, the business development and innovation general manager for OneRoof's data partner, Valocity, said that while not directly linked, there was potentially overlap in low house sales resulting in low rental growth.
"We are seeing that with less properties transacting, and owners opting not to bring properties to market, [it] means there are more properties than advertised for rent," Wilson said.
"When more rental stock comes to market, over time this can have a softening impact on rental rates."
Bayleys rental business development manager Brittany Morgan said more people were accepting the higher rental costs.
"When rental prices began to climb substantially they saw families move in with each other and more shared living situations to cut costs," Morgan said.
"Initially people thought maybe it would be for a season and then it would be over, but I think more people have now accepted it a bit more."
She said real estate agents had seen more people than usual change from trying to put their houses up for sale to taking them off the market and renting them out.
"It's a bonus for the vendor, generating income for their asset through rent as opposed to it sitting empty waiting for it to sell.
"Some people are in a situation where rent prices have increased so much over time that they no longer have to sell their property to move on to other things and generate income."
Whanganui's average household income has risen 4.8 per cent in 2022, and it average per capita income is up 2.2 per cent (per capita income accounts for all sources of household income as well as household size).
Whanganui & Partners chief executive Hannah Middleton said it was great the average income was up, but she was aware rent had also risen.
"Along with the cost of living, another factor which impacts people's ability to move to and stay in Whanganui is the availability of rental accommodation," Middleton said.
"Anecdotally, we hear the availability of rental properties is currently a barrier for employers' ability to attract and retain staff."
Meanwhile, Eaqub said rising rents, among wider increases in living costs, could push out those on lower incomes.
"Over 30 per cent of households in Whanganui received some form of housing subsidy, which will be the group most affected by rising rents," he said.
"They are already in housing stress and when cost of housing increases they tend to increase faster than the welfare policy settings - for example, the rental caps for the accommodation supplement."
Eaqub said the population and economy of Whanganui had been growing consistently since around 2014.
"That's when population and economic growth turned positive - before that Whanganui was in the doldrums."
