Christchurch back in its rental rhythm

Christchurch landlords have reason to smile again after the city’s median weekly rent increased year-on-year for the first time since March 2015, according to the latest Trade Me Property Rental Index.

Head of Trade Me Property, Nigel Jeffries, said that landlords and tenants in the Garden City have had a turbulent few years following the earthquakes, and the subsequent rebuild. “Rents in Christchurch have moved a lot over the last few years - following the earthquakes there was a huge spike in rental costs, which got as high as $495 in March 2015. Median weekly rents are now $100 less at $395, but they’re $5 up on June’s low.

“While this increase is small, it’s a signal that Christchurch’s rental market has found its happy place. It’s been helped by an increase in available rental properties in Christchurch as the rebuild slows, there are currently 250 more properties available now than July 2012.

“This means that supply is better meeting demand which is helping to stabilise prices. We don’t expect to see any significant drops in the median weekly rent in the foreseeable future, it appears Christchurch has finally found its rental rhythm, giving both tenants and landlords plenty to smile about,” Mr Jeffries said

Auckland lingers

While Auckland’s ‘for sale’ market is cooling the rental market has never really caught fire according to Mr Jeffries. “Auckland landlords have certainly never seen the rent jumps that the for sale market experienced. The median weekly rent in the super city has been $530 for the last four months and pretty stable for some time,” he said.

“This is mirrored by New Zealand’s overall rental market too. Nationwide median weekly rents are relatively stagnant, up a miniscule 2.3 per cent in the last 12 months to $450 per week.”

Regions on the rise

While nationwide rents are flat, there are still a number of regions experiencing huge jumps in rent compared to this time last year. Northland hit a new record, jumping up 14 per cent from last July to $399 per week. Gisborne and Marlborough joined the party too, both up 16.7 per cent.

For the first time in a long time no regions in the country saw a year-on-year decrease in median weekly rent with Taranaki, Canterbury and Southland the only regions unchanged from last year.

“While the rental market is relatively slow overall, the absence of decreases is a very good sign of a healthy market,” said Mr Jeffries.

Wellington stays strong

Mr Jeffries said Wellington’s “pressure cooker” market has continued and tenants in the capital will be feeling the pinch. Median weekly rents in the Wellington region continued their upward trend in July, up 7.1 per cent on last year to $450. Tenants can expect to pay an extra $1,560 a year to rent the typical property in Wellington.

“Wellington is a perfect example of where we’re seeing renters stay put and save their money rather than move into first homes. We’ve seen a reduction in the number of Wellington rental properties on the site for the last six months which indicates the LVRs are biting.”

Tenants stay put

Wellington is not the only region seeing a dip in available rental properties. Growing house prices and Loan to Value Restrictions are driving tenants to renew tenancy agreements rather than move up the ladder to first home purchase, Mr Jeffries said.

“We’ve seen a 15 per cent reduction in rental listings across the country in the last year which we’re putting down to many Kiwis staying put in their rental. It’s taking longer to get a deposit together so many Kiwis are hanging on to their rental longer and staying there rather than try their luck in a tough rental market.”

Apartments outside Auckland reaches new high

The cost of apartment living outside Auckland hit a new record in July, climbing 6.4 per cent since July 2016 to $399 per week. “In the last five years, apartments outside the Super City have soared a staggering 20 per cent, costing tenants a whopping $3,588 more per year,” Mr Jeffries said.

“Apartments continue to be very popular in Auckland too. At $480 per week, apartments in the Super City are up 2.1 per cent year-on-year, and are just $10 away from the record high they hit in April, as increasing demand continues to keep prices up,” Mr Jeffries said.

ENDS

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/

• Regional data: If you are after information for a particular region, please email Millie Silvester via mediaenquiries@trademe.co.nz and we will see what we can unearth for you. We can also provide the graphs and tables.

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