Corelogic Lower Hutt
Kelvin Davidson, Senior Property Economist, Corelogic
1 April 2020
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.
Lower Hutt’s rental property market is dominated by houses, with only a handful of flats and apartments in a few selected suburbs. Of the 193 properties recently on the market, 84% (163) have been houses, with another 9% being flats (18 properties) and the remaining 6% (12) being apartments. The apartments are all in Hutt Central/Waterloo, and flats are spread across the same suburb, as well as Epuni/Avalon and Moera/Waiwhetu.
The largest market across Lower Hutt for rental houses is Wainuiomata, with 30, followed by Epuni/Avalon (27) and Western Hills/Haywards (24). Taita Naenae is also a decent-sized market for rental houses (22). Although Eastern Bays, Petone/Esplanade, and Stokes Valley are smaller markets, every rental property available in these suburbs has recently been a house.
Because of the presence of flats and apartments, only 47% of recent rental properties available in Hutt Central/ Waterloo have been houses.
House Size, By Bedroom Count
Of the 163 rental houses recently on the market in Lower Hutt, 100 have had three bedrooms (61%), another 52 with two bedrooms (32%), and 11 with four bedrooms (7%). None had either one or five bedrooms – and with 93% in the two or three-bedroom bracket, it’s pretty clear that Lower Hutt’s rental house stock is towards the smaller end of the spectrum.
The only suburbs in Lower Hutt with four-bedroom rental houses have been Western Hills/Haywards (six) and Wainuiomata (five). The largest markets for three-bedroom rental houses are Wainuiomata (16), and Epuni/Avalon and Taita/Naenae with 14 apiece. In terms of concentration, 100% of rental houses in Petone/Esplanade and Stokes Valley have had three bedrooms. Epuni/Avalon is the largest suburb for two bedroom rental houses, with 13.
But in terms of concentration, Eastern Bays (50%) is just ahead (Epuni/Avalon is 48%).
Rent And Yield
By matching average value to rent we can look at gross yield for three-bedroom houses in each area. Median weekly rents for three-bedroom houses across Lower Hutt vary quite widely, from $455 in Wainuiomata up to $650 in Petone/Esplanade. Median values for three-bedroom houses vary even more widely, from about $497,000 in Wainuiomata up to almost $929,000 in Eastern Bays.
The result is that gross rental yields for three-bedroom houses across Lower Hutt have a large spread, from just 3.6% in Eastern Bays and Hutt Central/ Waterloo up to 5.5% in Stokes Valley.
Apart from Eastern Bays and Hutt Central/Waterloo, each suburb has a gross rental yield for three-bedroom houses of at least 4%, so in a national context, this potentially makes the wider Lower Hutt market an attractive investment choice.
On top of that, rental growth in many parts of Lower Hutt has been very strong over the past year. Rents for three bedroom houses have risen by at least 16% in Petone/Esplanade, Stokes Valley, and Western Hills/Haywards. The other suburbs have been respectable too, with only Hutt Central/Waterloo showing a weaker trend (drop in rents of 5% in the past year).