Would you be able to do the geometric mean rents as Real / inflation adjusted numbers? Seeing the rent go up year on year is somewhat misleading as a portion of that is the currency becoming worth less and less. For example Auckland rents in late 2022 were at a 5 year low in real terms, presumably after sustained increases building supply.
Or would that not make sense for what you're trying to show?
Take a careful look at the first chart, rents as a proportion of Household Income. Rents have not increased since 1998 as a proportion of household income, as I think you expect in your comment about inflation adjustment. In Auckland the percentage drops to an all-time low in 2022. Exactly what you are looking for?
Note that rents don't actually go up with CPI particularly well because CPI doesn't match HH income very well. I have done that in the past, but not found it useful.
Tenants can only spend so much, and that tends to be a constant percentage of their total income in the household - note, not wages which are a very poor substitute, many have side-hustles and benefits that are not counted in wages.
Would you be able to do the geometric mean rents as Real / inflation adjusted numbers? Seeing the rent go up year on year is somewhat misleading as a portion of that is the currency becoming worth less and less. For example Auckland rents in late 2022 were at a 5 year low in real terms, presumably after sustained increases building supply.
Or would that not make sense for what you're trying to show?
Thank you for the question, a really worthwhile review for me! Hopefully I can answer the point clearly
Take a careful look at the first chart, rents as a proportion of Household Income. Rents have not increased since 1998 as a proportion of household income, as I think you expect in your comment about inflation adjustment. In Auckland the percentage drops to an all-time low in 2022. Exactly what you are looking for?
Note that rents don't actually go up with CPI particularly well because CPI doesn't match HH income very well. I have done that in the past, but not found it useful.
Tenants can only spend so much, and that tends to be a constant percentage of their total income in the household - note, not wages which are a very poor substitute, many have side-hustles and benefits that are not counted in wages.