Kelvin Davidson, Chief Property Economist
1 December 2021
Rental data is sourced from the Ministry of Business, Innovation and Employment based on rental bonds lodged. This 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 property 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 property value calculated using our E-Valuer.
The rental market across Rotorua is dominated by houses. Indeed, of the 348 properties recently available for rent, 78% have been houses (273 properties), with 16% flats (54), and 6% apartments – all 21 of those in Kuirau/Hillcrest/Glenholme.
The largest sub-market for rental houses lately has been Ngongotaha/ Pleasant Heights/Koutu, with 114 properties, followed by Kuirau/Hillcrest/ Glenholme with 87. However, in terms of the concentration of houses amongst all of the recently available rental properties, it’s the rest of Rotorua that ranks higher. Indeed, 100% of the market lately has been houses in rural Rotorua, Pukehangi South/Springfield, and Holdens Bay/ Owhata/Ngapuna. Ngongotaha/Pleasant Heights/Koutu and Kuirau/Hillcrest/ Glenholme are the only areas where flats have recently been available for rent, especially the latter, where there’s been 45 on the market lately, or 29% of activity.
House Size, By Bedroom Count
Looking specifically at houses (273 properties), 56% recently on the rental market across Rotorua have had three bedrooms, or 153 properties. Another 29% have had two bedrooms, and 4% one bedroomed. It’s common for rental houses to be towards the smaller end of the spectrum. Only 9% of recent properties have had four bedrooms and 2% with five here.
In that five-bedroom category, all of the houses recently available for rent (six) have been in Ngongotaha/Pleasant Heights/Koutu, while Kuirau/Hillcrest/ Glenholme is the only area that’s had onebedroom houses for rent (12 properties). There’s been a handful of four-bedroom properties recently available for rent in each of Holdens Bay/Owhata/Ngapuna, Kuirau/Hillcrest/Glenholme, and Ngongotaha/Pleasant Heights/Koutu.
For two-bedroom houses, the largest markets have been Kuirau/ Hillcrest/Glenholme and Ngongotaha/ Pleasant Heights/Koutu, although the concentration has been highest in rural Rotorua. Meanwhile, for four-bedroom houses recently available for rent across Rotorua, Pukehangi South/Springfield has had the highest concentration, at 75%.
Rent And Yield
Median weekly rents for three-bedroom houses across each of Rotorua’s submarkets are actually quite tightly bunched, ranging from $485 in rural Rotorua to $533 in Pukehangi South/ Springfield. However, the range for median values is much wider, with the level for Ngongotaha/Pleasant Heights/Koutu currently sitting at $540,850, up to $846,200 in rural Rotorua.
In turn, gross yields for three-bedroom houses also differ quite markedly, from only about 3.0% in rural Rotorua, up to 4.8% in Ngongotaha/Pleasant Heights/Koutu. The other sub-markets are bunched at around the 4% mark. By national standards (typically now less than 3%), a yield of about 4% or more in most parts of Rotorua looks quite attractive.
Rental growth for three-bedroom houses in Rotorua has also been strong over the past year, ranging from at least 7.2% in Kuirau/Hillcrest/Glenholme up to a buoyant 15.5% in rural Rotorua.