Author:Peter Nunns, Hadyn Hitchins, Paul Owen
Source:Auckland Council Research and Evaluation Unit, RIMU
Housing policy is an increasingly important topic in Auckland. Policymakers and the general public are particularly concerned about the substantial increase in median house prices relative to household incomes. Increases in house prices have coincided with a general increase in the number of households that live in rental properties. There is evidence that renting, like home ownership has also become more costly, particularly for those on low incomes, and that rentals are often low quality and potentially unhealthy.
In response, both Auckland Council and central government have developed and begun to implement policies to address issues in the housing market. These policies include increasing the pace of housing development in Auckland and finding practical ways to identify and improve poor quality rental housing.
To assist with policy development, this report investigates the relationships between house prices and rents in Auckland. It examines how house prices and rents have changed over time and how they vary at a detailed spatial level. It attempts to control for the size of dwellings but finds that there is not sufficient data to control for other variations in housing quality. Understanding these trends provides more context to the housing and rental markets in Auckland, and can assist policymakers to make more informed decisions about how to implement housing policy in Auckland.
The analysis was focused on four key questions:
- First, at a regional level, has the relationship between house prices and rents held constant over time, or have the two data series followed different trends?
- Second, at a point in time, is there a correlation between house prices and rents at a detailed geographic level? In other words, if sale prices are high in a neighbourhood, are rents also likely to be high?
- Third, are indicative rental yields (a measure of the relationship between prices and rents) constant throughout the Auckland region or do they vary between areas?
- Fourth, are there any geographic patterns in changes to indicative rental yields between Census years? ...
Auckland Council technical report TR2015/002