Corelogic Napier & Hastings
Kelvin Davidson, Senior Property Economist, Corelogic
30 November 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 rental property market across Napier and Hastings is dominated by houses, with a handful of flats, and a small number of apartments (all in Napier).nOf the 465 properties on the market, 356 are houses (77%), with 83 flats (18%), and the remainder in apartments (26). This breakdown of the rental market is pretty similar to most other parts of the country.
Napier has the most rental houses (123), followed by Hastings/Clive (105), and Taradale/Awatoto (46). However, in terms of concentration, only 66% of rentals in Napier are houses, and 72% in Hastings/Clive. By contrast, 100% of the market in Taradale/Awatoto is houses, the same for Havelock North and Rural Hastings. In other words, those latter three areas have no apartments or flats.
Indeed, only Hastings/Clive (40), Napier (38), and Flaxmere (five) have rental flats, and only Napier (26) has apartments.
House Size, By Bedroom Count
Now looking at the 356 rental houses on the market in Napier and Hastings, none have only one bedroom and nor do any have five bedrooms. The biggest concentration (69%, or 246) is in the three-bedroom bracket, the same as many other parts of the country. Napierm and Hastings have 66 two-bedroom rental houses (none in Rural Hastings), and 44 with four bedrooms (none in Flaxmere).
Hastings/Clive (26) and Napier (20) have the most two-bedroom rental houses, while Napier (14) and Havelock North (10) have the most with four bedrooms.
In the most common three-bedroom bracket, the most rental houses are in Napier (89) and Hastings/Clive (71). Most of the Napier and Hastings subareas have 60-70% of their rental house stock in this bracket, but Flaxmere stands out – its 23 three-bedroom properties are 82% of the total rental house stock in that sub-area.
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 threebedroom houses in Napier and Hastings vary from $375 in Flaxmere up to $500 in Havelock North. There is a cluster of sub-areas around the $440-$460 mark. Median property values for three-bedroom houses differ to a larger degree, ranging from less than $320,000 in Flaxmere right up to more than $670,000 in Havelock North.
That results in a wide range of gross rental yields too. Flaxmere has a yield up at 6.1% for three-bedroom houses, whereas Havelock North is less than 4%, and Rural Hastings only 3.6%. Even so, all yields across Napier and Hastings still look respectable in a national context.
At the same time, rental growth has been solid. Even a 5.3% rise in rents for three-bedroom houses in Havelock North is fairly decent, while gains of 10% in Hastings/Clive and more than 12% in Napier are very strong.