The leases that lasted 20 years

New data from the Ministry of Housing and Urban Development show that New Zealand’s average lease now has 50 months, against 28 in 2010.
Photo: RNZ / REECE PADIER

Wellington Woman Carla rents her property from Ngaio for 20 years.

She had just moved to New Zealand when she found her while looking for a temporary place to live.

“It was the second or third place we saw. We liked the house, easy access to the train, library and local playgrounds. We didn’t have a car. We said we wanted and understood … It looks like a fairy tale.”

Over the time she is renting, her rent has not got up much.

“I fully recognize that we are ridiculously lucky in that. But I worked hard to be a good tenant. We have good confidence between us right now.

“If something breaks, I sent an E -mail so that he knew, arrange for him to be corrected and send the bill to pay. He told me that he will not increase the rent unless his expenses change. His house insurance went up last year, so he raised the rent to cover this cost, but explained to me.”

She said she now paid significantly less than the market rent, but the house was a little misaligned and took care of minor maintenance problems. “He has very little job to do. For my family, it’s the perfect arrangement.”

She said she could not imagine how hard or more stressful life would have been if she had to worry about housing or move often while raising her children, who are now 16 and 20 years old.

While Carla, who didn’t want to be identified, knew her story was unusual, she didn’t realize how unusual.

Half of New Zealand’s leases are under two years old and only 1 % are in force for 216 and 228 months, or over 18 years. Nine percent have been in force for over 120 months.

Data from the Ministry of Housing and Urban Development show that the average lease of New Zealand is now 50 months, against 28 in 2010.

The median is 25 years old, above 14 in 2010.

Kelvin Davidson, chief economist of the Corelogic property company, said that although the lease duration increased, it was not yet “not long” – and if most people changed every two years, that was a revolt. “From the tenant’s point of view, it is good that it has doubled, but it is not yet ideal.”

He said he is probably aligned with other accessibility measures of housing that worsened in the same period of 15 years.

He took more time for people to save a deposit to buy a house, he said – about 10 years compared to seven in 2010. “It was as high as 13 or 14 when prices were at its peak.”

Some market settings have also changed to be more favorable to tenants and provide more security of possession. “Perhaps over time the owners have more scientific and run the numbers – on a standard rental property, even a two -week vacancy is expensive.

“People probably woke up and realized that the vacancy hurts, so that everything they can do to keep the tenant longer will help with the returns.”

Davidson said it was a relatively clear trend and there was no reason to think that would turn again. Movements such as more construction properties for rent would probably also increase the lease duration, he said.

Sarina Gibbon, general manager of Auckland Property Investors Association agreed that housing inaccessibility would probably mean that people were renting longer before they could buy.

“At the same time, work has changed dramatically. The younger workforce with their job jobs and digital nomadic lifestyles often value moving more than they value to have a home. Rent is more socially palatable for this generation than those who came before them.

“The interesting thing is that the longest leases really work well for everyone involved. Owners get this constant income without the discomfort of finding constantly new tenants, while renters can lower roots and create a real home.”

She said that staying in a lease longer meant that people paid less in rent, as was Carla’s experience.

“Owners usually keep the rent increases modest for good tenants, saving their great walks when someone leaves. So, jumping between rent can really cost you in the long run.

“I think we’re seeing a key change in the way kiwis thinks of housing. The rent used to be just one step on the stairs to buy. Now, for many, it’s simply a long -term housing solution. What I would love to see emerging from this change is a diversification of political fidrons and one of the most we stand out.

Gareth Kiernan, an infometric meteorologist, said there should be some caution around the data.

“If there is any incidence of old securities that are not removed from the system, because they are not claimed or an administrative error, the apparent average/median lease duration will naturally increase as the database ages.”

But he said, assuming this was not happening, he could show two possible things.

“Firstly, people are renting longer than in the past, which would be a non -surprising result, given the increase in house prices in relation to income and increased incidence of rent over time.

“The numbers also suggest that people are not just renting longer, but staying in the same rental property longer, on average – a result that would also be consistent with more people renting longer in life. For example, young people are usually relatively mobile, with job changes and can probably move changes in their situation. Given the interruption that can be caused by children who need to change schools.”

As for Carla, she says she’ll be more time. “We would like to possess and we are saving, but the cost … Heck. I will school my children at home, so I only worked in part in their lives.”

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