Affordability remains a pressing issue
The rising cost of living has become a prominent concern for many, especially renters seeking affordable housing options. Recent data from the Ray White Group, presented by senior data analyst Atom Go Tian (pictured), sheds light on the most affordable suburbs for renters in New Zealand.
Defining affordability
According to Stats NZ, average weekly earnings as of June 2023 were $1,273, marking a 25.3% increase from five years ago. During this period, the median asking rent for houses grew by 18.2% to $650, while units saw a 25% increase to $550. Despite weekly earnings growth outpacing rent growth, affordability remains a pressing issue.
To gauge affordability, the report considers weekly rent as a percentage of weekly earnings. As of June 2023, the median asking rent for houses constituted 51.1% of weekly earnings, down from 54.1% five years ago. In contrast, the share of rent for units remained relatively stable at around 42%.
Affordable suburbs
Using Australia’s “affordable” rent benchmark—33 to 35% of weekly earnings—New Zealand’s rent should ideally range between $425 to $450 per week. However, as of June 2024, Ray White’s data showed median asking rents increasing to $680 for houses and $575 for units.
For those seeking affordable house rentals, several suburbs stand out. Dunedin Central leads with 48 of its 158 house listings (31%) under $450 per week. Following closely are Oamaru North, Oamaru, and Taumarunui, with significant portions of their listings also under $450. Notably, Oamaru has the lowest median rent at $400, followed by Oamaru North at $425.
Other suburbs making the list include Auckland Central and Appleby, though their affordability is relatively limited with only 26 and 25 listings under $450, respectively.
The search for affordable units is most promising in Auckland Central and Hamilton East. Auckland Central had 474 of its 2,111 unit listings (22%) under $450, while Hamilton East followed with 363 out of 570 listings (64%). Melville stands out with the lowest median rent at $350, with a substantial 67% of its listings under $450.
Other notable mentions include North Dunedin and Dunedin Central, offering a significant number of affordable units despite higher median rents.
Avoiding major cities
The data indicates that renters prioritizing affordability might need to avoid major cities like Auckland and Wellington. In Auckland, only 1.9% of house listings were under $450, while Wellington fared slightly worse at 1.8%. However, the outlook is slightly better for units, with 10.8% of Auckland’s and 7.7% of Wellington’s unit listings under $450.
While the rising cost of living poses challenges, several suburbs across New Zealand offer relatively affordable rental options. Dunedin Central, Oamaru, and Hamilton East are among the top choices for those seeking budget-friendly housing. Renters are encouraged to consider expanding their search beyond major cities to secure more affordable living arrangements.
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