80% increase for Wellington rents
Economist Shamubeel Eaqub produced a study, believed to be Wellington's first, on the city's specific rental history.
The purpose of the study was for The Wellington Company to understand where the city's rental market was going based on how the market has trended historically, so that The Wellington Company can make informed decisions about how best to tackle housing supply and affordability.
This morning we are releasing the findings from the report (attached).
At a high level, the points are as follows:
-Rents typically increase
faster than CPI
-House prices are not a significant factor
-We have enough evidence that household income is the key determinant of rent and a constraint (if no money left, leads to crowding or people leaving for elsewhere)
- Rents can fall in specific cases (oversupply, economic weakness, or both), but never over long periods
- Since 1995 in Wellington City: Rents have increased by 4%pa
(interquartile range of 2%-6%)
15 years to 2018, cumulatively Wellington City rents have increased by 80% and CPI has increase by 37%