Auckland rental prices boiling while Christchurch cools

Auckland rental prices boiling while Christchurch cools

As rent increases slow in much of the country, Auckland is forging its own path with the median weekly rent reaching yet another high, up to $490 per week for May. Rents in Auckland have increased by 6.5 per cent in the year to May 2015, ahead of the national increase of 6.3 per cent.

The national median weekly rent remains unchanged at $420, a record which was first reached in January of this year. It has now been hovering around this mark for five months.

Head of Trade Me Property Nigel Jeffries said that Auckland tenants are now paying a median rent of $25,480 a year while the national median sits at $21,840, a difference of more than $3,500.

“It’s an all too familiar scenario for those renting in the Super City - we’ve seen the average price of houses explode and the rental market continues to follow a similar trajectory.”

“For renters outside Auckland it’s a little easier, with median rents flat or declining in several areas. We’ve seen 2015’s weakest month for median rent prices in May, but that’s not to say it’s cheap,” Mr Jeffries said.

“It’s also worth remembering that over the past five years the median weekly rent across New Zealand has risen 23 per cent from $340 to $420 and that’s much, much faster than household inflation.”

The Trade Me Property Rental Price Index measures trends in the expectations of median weekly rents for residential properties on Trade Me Property that have been rented out by real estate property managers and private landlords over the past month. Around 12,000 rental properties are let out via Trade Me Property each month.

Ups, downs and plateaus in the regions

May is the weakest month of 2015 so far, with only eight of the 15 regions reporting increases in median rent. In the first four months of the year, at least 11 regions reported an increase in median rent each month.

In May, the weakest region was Gisborne (down 9.2 per cent compared to a year ago), closely followed by Otago (down 6.3 per cent) and the West Coast (down 5.7 per cent). The 2.8 per cent fall in Taranaki reverses the strong double-digit rises in the region over the past year of between 10 and 20 per cent.

Bay of Plenty stood out with an 11.4 per cent increase – the largest of any region and the only double-digit lift. Median weekly rents in the Bay rose to $368 a week, up $38 per week since May 2014. This represents another record high in the Bay, making it six consecutive months of record highs. In the past two years, the median weekly rent has risen 18.5 per cent.

Christchurch rental market slows

As the city changes and the rebuild progresses, the Christchurch market has slowed with only small one and two-bedroom houses showing a year-on-year rise in median rents. Rents in the city have been cooling considerably in recent months, after peaking in the second half of 2014.

Table 1: Median weekly rent by property size & region

Units and apartments power on

May delivered record highs in median weekly rents for both apartments and units, up $30 and $25 respectively in the last year.

Auckland powered on with apartment rents topping $450 a week, up $40 on this time last year, a third consecutive record month. In Christchurch, apartments, townhouses and units all reflected the same weakness present in the city’s housing sector with limited change. In Wellington, median rent for apartments and townhouses declined.

Table 2: Median weekly rent by property type & region

ENDS

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