Corelogic South Canterbury
Kelvin Davidson, Chief Property Economist
1 September 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 markets around the southern parts of Canterbury are dominated by houses, as tends to be the case in most parts of the country, certainly in “provincial” areas. Of the 252 properties recently on the rental market, 213 (84%) have been houses, with 30 flats (12%) and nine apartments (4%). All of the flats and apartments have been in Tīmaru.
Tīmaru has been the largest market for rental houses lately, with 114 – followed by Mackenzie/Waimate with 54, and Rural Tīmaru/Temuka/Geraldine at 45. Given the absence of apartments and flats in those latter two areas, their concentration of houses amongst the properties recently on the rental market is obviously 100%. Tīmaru has had 75% houses, 20% flats and 5% apartments.
House Size, By Bedroom Count
Looking specifically at houses (213 properties), 56% recently on the rental market across the southern parts of Canterbury have had three bedrooms, with another 28% in the two-bedroom bracket and 13% with four bedrooms. Only 3% have had one bedroom (all in Mackenzie/Waimate) and none with five. It’s common across the country for rental houses to be towards the smaller end of the spectrum (especially two or three bedrooms), rather than being larger fivebedroom stock.
For three-bedroom houses recently on the rental market, the most have been in Tīmaru (75), with 27 in Mackenzie/ Waimate, and 18 in Rural Tīmaru/Temuka/ Geraldine. By concentration, threebedroom properties have been 66% of the rental house market in Tīmaru, 50% in Mackenzie/Waimate, and 40% in Rural Tīmaru/Temuka/Geraldine. The most four-bedroom houses have been in Tīmaru (12), although the concentration has been a bit higher in Mackenzie/Waimate (17%). Meanwhile, for two-bedroom houses recently on the rental market, Tīmaru has had 27, Rural Tīmaru/Temuka/Geraldine 21 and Mackenzie/Waimate 12. That has meant the highest concentration (47%) in Rural Tīmaru/Temuka/Geraldine.
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 across the southern parts of Canterbury range from $350 in Mackenzie/Waimate up to $390 in Tīmaru. There is also a relatively tight range for the median values of these properties, ranging from about $424,000 in Rural Tīmaru/Temuka/Geraldine up to $471,000 in Mackenzie/Waimate.
However, with the lowest rent but the highest median values, yields in Mackenzie/Waimate for three-bedroom houses come out lowest, at 3.9% – quite a bit below the figures of 4.5% in Tīmaru and 4.6% in Rural Tīmaru/Temuka/ Geraldine. Of course, by the standards of many other parts of the country (where yields are below 3%), all of these areas still look relatively good.
Rental growth for three-bedroom houses has also been strong, ranging from 6.6% in Rural Tīmaru/Temuka/ Geraldine over the past 12 months up to 9.4% in Mackenzie/Waimate.