Media Release
21 December 2016

Little Christmas cheer for tenants

Kiwi tenants have less to cheer about this Christmas with New Zealand’s median weekly rent increasing for the first time in four months, and hitting a record high $445 in November, according to the latest Trade Me Property Rental Index.

Head of Trade Me Property Nigel Jeffries said the median weekly rent was up 3.5 percent on this time last year. “It’s been a subdued year for the rental market, but this jump in November looks like the first of the typical summer increases.

“Rents almost always increase in January as rental stock hits the market and landlords seize the chance to reassess the value of their rental property. We’re seeing some decent median weekly rent jumps already, particularly in Auckland and Wellington, and we suspect more increases are imminent.”

Over the past five years New Zealand’s median advertised rent has risen 27.1 per cent from $350 per week to $445 per week, adding close to $5,000 to the annual cost of renting a typical property.

Mr Jeffries said the Auckland market is a significant contributor to the month-on-month increase, having increased by $10 to $520 a week. “That’s the second consecutive $10 jump in Auckland after months of stagnation, so the market is coming to life and landlords are finally feeling like they can pass more costs on.

“The Super City’s median weekly rent hasn’t been this high since April this year, and while it’s fluctuated throughout the year the last three months have been strong – there are signs there that a record high is not far away.”

Wellington keeps edging up

Mr Jeffries said that Wellington has seen a very strong end to the year. “Rents in Wellington have risen by 9.5 per cent in the past year, adding nearly $2,000 to the annual cost of renting a property and taking the median rent in November to $433 a week.

“This year has been a challenging one for tenants in the capital as rents have been rising year-on-year for most of the year. That increase has accelerated from two or three per cent early in 2016 to closer to 10 per cent in the past five months.

“Wellington’s rent prices are very cyclical – they build in October each year, and peak in January before a mid-year plateau. October and November have already been extremely strong so we’re expecting to see a pretty strong peak come January.”

Around the regions

The Bay of Plenty continues to be the standout region from a landlord’s perspective, with another double-digit increase in median weekly rent on this time last year. The Bay is up 10.5 per cent on last year, going from a median weekly rent of $380 to $420. Over the past 2 years rents in the Bay of Plenty have risen a “staggering” 27 per cent.

Elsewhere around the country, rents increased everywhere except Gisborne (down 14.3 per cent) and Canterbury (down 4.2 per cent).

All house sizes soaring in the Capital

While all property types across New Zealand saw strong median weekly rent increases in November (up 3.5 per cent) Mr Jeffries said that Wellington stuck out. “All property types in Wellington are soaring and it could be a tough market in the New Year.

“Tenants in the Capital are going to be forking out a lot more on their rent now – particularly for large houses (5+ bedrooms) and the most popular housing option, medium houses (3-4 bedrooms) which jumped an incredible 11.9 and 11.1 per cent respectively.

Meanwhile Auckland saw strong rises across all property types and all Christchurch houses fell except large houses which saw a modest increase (2.5 per cent).

Table 1: Median weekly rent by property size & region: November 2016 vs November 2015

Urban living options still offer more affordability

Tenants looking for a better deal on their rent may be best to look at urban property options with apartments and units rising slightly over the last month while townhouses were down.

“Units are seeing some fluctuations in regions around the country, they’re up five per cent in Auckland and more than six per cent in Wellington year-on-year. Other areas are also seeing strong jumps for units with Waikato up more than 10 per cent and Northland up almost 17 per cent.”

Table 2: Median weekly rent by property type & region: November 2016 vs November 2015

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NOTES

About the Trade Me Property Rental Price Index: This report provides a comprehensive monthly insight into the rental market covering price trends by type and size of property across New Zealand. The index is produced from Trade Me Property data of properties that have been rented in the month by property managers and private landlords. On average over 11,000 properties are rented each month and the report provides a comprehensive insight into this part of the property market for tenants, landlords and investors. The index is calculated using the median rent in the month, this being an accurate statistical assessment of the current rent being charged by landlords and property managers.

More info: For information about the differences between the Trade Me Property data and bond data collected by Tenancy Services, please read this post by Dr Lucy Telfar-Barnard from the University of Otago: http://onetwothreehome.org.nz/2015/05/11/how-high-is-the-rent/

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