Core Logic Mid And South Canterbury
Kelvin Davidson, Senior Research Analyst Corelogic
1 July 2019
Rental data is sourced from the Ministry of Building, Innovation and Employment (formerly the Department of Building and Housing) based on rental bonds lodged. This rental data is supplied to us, grouped into geographic areas based on statistical area units used by Statistics NZ for the census, and as a result do not always match well with common usage suburb names. The rental data for each area is matched to house price information from our database to determine property prices and therefore yield. The yield is calculated as the annualised rental income divided by the median house value calculated using our E-valuer.
The Mid and South Canterbury rental property market is dominated by houses, with a handful of flats but no apartments. Of the 432 properties on the market, 384 (89%) are houses, with the remaining 48 properties being flats (11%).
The biggest market in terms of rental houses is Timaru, with 143 properties. Ashburton is next with 139 houses, then Mackenzie/Waimate (56) and Rural Timaru/Temuka/Geraldine (46) are much smaller. Timaru also has the most flats (35), while there are 13 in Ashburton.
The entire stock on the market in Mackenzie/Waimate and Rural Timaru/Temuka/Geraldine is houses (so in other words, no flats or apartments). Houses account for 91% of Ashburton’s rental property on the market, and 80% in Timaru.
House Size, BY Bedroom Count
Of the 384 rental houses in Mid and South Canterbury, there are none with either one bedroom or five bedrooms. There are 92 houses with two bedrooms (24%) and another 44 with four bedrooms (11%), leaving 65% (248) in the three-bedroom category. It’s common across most of the country for the stock of rental houses to be concentrated in the three-bedroom bracket. T
he spread of rental houses across each of the size brackets is pretty uniform across the various parts of Mid and South Canterbury. Each area has between 21% (Mackenzie/Waimate) and 28% (Rural Timaru/Temuka/Geraldine) of houses in the two-bedroom category, and 11-13% in the four-bedroom bracket. The range for three bedrooms is also pretty tight – from 61% in Rural Timaru/Temuka/Geraldine up to 66% in Ashburton.
Timaru has the most two-bedroom (35) and four-bedroom (17) rental houses on the market, but Ashburton has slightly more three-bedroom houses (92, versus 91 in Timaru).
Rent And Yield
By matching average value to rent we can look at gross yield for three-bedroom houses in each area.
It’s a relatively tight range for median weekly rents on three-bedroom houses across Mid and South Canterbury, from $300 in Mackenzie/Waimate to $350 in Ashburton and Timaru. Rural Timaru/ Temuka/Geraldine slots in between, at $335. Across these areas, the median property values for three-bedroom houses range from about $344,000 in Ashburton up to almost $369,000 in Timaru.
The slightly lower rents in Mackenzie/ Waimate but still relatively high median property values combine to leave the gross yield on three-bedroom houses the lowest in this area, at 4.3%. Of course, that is still respectable compared to the national figure, across all property types and bedroom counts, of about 3.3%. Elsewhere, Timaru and Rural Timaru/ Temuka/Geraldine have gross yields on three-bedroom rental houses around the 5% mark, and Ashburton is a little higher, at 5.3%.
Although yields are a little lower in Mackenzie/Waimate, rental growth is strong, at 11.1% over the past year. By contrast, rents on three-bedroom houses have fallen by 1.5% over the past year in Rural Timaru/Temuka/Geraldine.