Rents remain high as summer looms

Rents remain high as summer looms

New Zealand’s national median rent is showing no signs of slowing down after increasing 6.7 per cent year-on-year in September and remaining at an all-time high of $480 per week, according to the latest Trade Me Rental Price Index.

Head of Trade Me Property Nigel Jeffries said there were some “ominous” signs for tenants ahead of the typically hectic summer rental period. “Winter rent prices remained relatively steady this year, instead of taking the dips we normally see.

“It feels like the calm before the summer rental storm, and tenants could be in for some ominous rent rises in the coming months, with tightening supply evidenced by a 6 per cent dip in the number of rentals onsite year-on-year and a number of areas experiencing lifts in demand.

“Some tenants are making a move now to avoid the summer madness," he said.

Mr Jeffries said rents in both Wellington and Auckland have remained high, with the median rent at $480 per week and $550 per week respectively.

Mr Jeffries said some regions had seen strong double-digit growth, with rents in Marlborough up 20 per cent to $385, West Coast up 19.1 per cent to $280, Otago up 16.9 per cent to $450, and Hawke’s Bay up 16.9 per cent to $400.

Wellington rents warm up ahead of summer rush
Tenants in the capital can expect to pay $30 more a week in rent compared to last year, after the median rent in Wellington rose 6.7 per cent to $480 per week in September.

“While the median weekly rent in Wellington City has seen strong annual growth of 9.3 per cent to $530, it’s the outer areas of Upper Hutt, Porirua and Kapiti Coast which show the largest annual increase.”

Upper Hutt had seen the biggest year-on-year growth of 18.6 per cent to $415, followed by Kapiti Coast which was up 15.4 per cent to $450 and Porirua climbed 14.5 per cent to $500.

“After last summer’s hectic rental market in the capital, we’re seeing some signs that this summer might be much the same for Wellington tenants. The market is heating up already.”

“Wellington’s three most popular rentals in September were all from Lower Hutt - it’s a hot favourite for tenants embracing a longer commute in exchange for cheaper rent.”

Table 2: Wellington’s most popular rental listings in September 2018

Auckland rents stay put
Mr Jeffries said the median weekly rent in Auckland remained at a record high of $550 for the sixth month in a row, up 5.8 per cent on last year.

“Auckland rentals had a 13 per cent increase in the number of enquiries in the first two days onsite compared to September 2017. The demand in the city was greatest in Manukau and Rodney, both areas reached record median rents and climbed 10 per cent to $550 and 4.7 per cent to $555 respectively. Auckland City remained at $550 for a fourth month after rising 4.8 per cent on last year,” he said.

Table 1: Auckland’s most popular rental listings in September 2018

Huge demand for Waikato rentals
Mr Jeffries said Waikato was experiencing a surge of demand for rental listings, with an 80 per cent increase in the number of enquiries in the first two days onsite.

“A solid increase in demand for rentals in Waikato has pushed the median weekly rent up a solid 7.9 per cent on last year, to $410 in September.”

Mr Jeffries said this increase was driven by a 15 per cent drop in the number of listings and an accompanying 100 per cent increase demand for Hamilton rentals.

“The most popular rental property on Trade Me in September was a three-bedroom house in Hamilton which received 77 enquiries in the first two days.”


Otago rents run hot
Mr Jeffries said the median rent in Otago was up 16.9 per cent on last September to remain at a record $450 per week for a second consecutive month, as rents in the region run hot.

“This increase has been driven by a strong demand for rentals in Dunedin, with a 21 per cent increase in the number of views in the first two days onsite. The median weekly rent in Dunedin was up 18.5 per cent on last year to $430 a week,” he said.

Mr Jeffries added that this was the largest year-on-year rent increase Dunedin had seen in at least three years.
All houses show strong growth
“Rent for large (5+ bedrooms) and medium houses (3-4 bedrooms) across the country showed the largest annual increase in September, but all house sizes showed strong growth.”

Mr Jeffries said large houses were up 4.0 per cent to $780 and medium houses rose 3.9 per cent to $530 per week. Outside Auckland, small houses saw the greatest increase, climbing 6.1 per cent to $350 per week.

Townhouses remain at all-time high
Mr Jeffries said townhouses across the country climbed 8.7 per cent on last year to remain at a record $500 per week, and units dipped slightly on August’s record high to $385 per week in September, up 4.1 per cent on last year.

“The median weekly rent for units, townhouses and apartments rose 6.1 per cent year-on-year to $435 per week in September, as tenants opted for urban properties that are typically warmer, drier and in close to the city,” he said.

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