Realestate.co.nz released some interesting stats last week (via Brainchild). Rents are falling. Because the stock of rental properties on the market, perhaps unable to sell, keep rising. Investors, unable to sell their investment property (at the price they want/need), are putting houses (back) up for rent. And the massive net outflow of Kiwis headed to Australia (or Europe) add to the stock of listings. As listings rise, would-be renters are flush for choice and are seeing rents fall. Rents have fallen by an average of 3% since the peak last year, and are down $20 per week or $1000 per year. This is great news for many renters and household finances. The cost-of-living crisis has ravaged discretionary spending. But now, it seems, the cost-of-living crisis is coming to an end. Inflation has fallen below income growth (just), and for many households their greatest expense (rent) is falling. We expect this downward pressure to ripple through domestic inflation pressure more broadly, adding even more downside risk to future inflation.
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