Rent pain continues for tenants in student towns

Tenants looking for a rental property in New Zealand’s student towns are facing high rents and stiff competition according to the latest Trade Me Property Rental Index.

Trade Me's Head of Rentals Aaron Clancy said the extreme demand for rental properties continued in February and was pushing prices up in many parts of the country. “January and February are typically very hectic months when lots of tenancies come up for renewal and students are looking for a flat before the University year kicks off.

“2019 has been no different and across popular student towns we’re seeing record rents and incredible demand. It’s extremely hard work finding a rental property at the moment and tenants are being asked to dig deeper into their pockets.”

Mr Clancy said Hamilton’s median weekly rent hit $440 in February, up 10 per cent on the year prior when the average asking price was $400. Demand for rentals was up in the city, with the number of enquiries up 29 per cent year-on-year, and supply of rental stock was not keeping up the number of properties for rent down 7 per cent.

Table 1: Hamilton’s most popular rental listings in February 2019

In Palmerston North, the median weekly rent price hit a record high of $390 in February, up 13 per cent on the previous year. Demand has jumped significantly too, up 32 per cent, while the supply of rental properties dipped dramatically by 29 per cent.

Table 2: Palmerston North’s most popular rental listings in February 2019

Mr Clancy said Auckland and Wellington, which both see an influx of students each year were also experiencing high rents and huge demand. “Auckland and Wellington’s rental markets have been experiencing phenomenal growth over the last six months. The supply just simply isn’t meeting the demand.

“It's hard out there for tenants, so you need to be prepared. Make sure you have all the documentation the property manager or landlord needs ready to go, present yourself as well as you can, and don’t be afraid to follow up if you’re waiting to hear back about your application.”

Mr Clancy said the only student towns to really avoid the pain were Christchurch and Dunedin. “Christchurch is seeing huge demand, but the number of rental properties seems to be keeping pace for now, and as a result the median weekly rent for the city was flat year-on-year at $400.

“Dunedin is a special case, generally student flats in the city are organised back in September and October, so we don’t see a jump in the city at this time of year like we do elsewhere.”

Auckland hits new record

“After lagging behind the capital, Auckland rents jumped in February with the median weekly rent hitting a new record for the region of $560, up 1.8 per cent on this time last year,” Mr Clancy said.

“Demand has jumped significantly in Auckland, we saw 15 per cent more enquiries last month than in February 2018, but no increase in the number of properties for rent. This demand and supply equation has seen prices jump.

“The most popular rental in Auckland, and all of New Zealand, for February was a one-bedroom apartment in St Lukes, receiving 113 enquiries in the first two days onsite.”

Table 3: Auckland’s most popular rental listings in February 2019

Wellington settles (slightly)

The median weekly rent in the Wellington region was up 8.2 per cent year-on-year to $530, a fall from January’s record high of $550.

Mr Clancy said that while Wellington had cooled slightly, there were still plenty of tenants looking for properties. “We saw 17 per cent more enquiries for Wellington rental properties in February this year compared to 2018.

“It looks like the frenetic market may be easing a bit after a supercharged December and January but we’ll be keeping an eye on it. The fact remains that Wellington doesn’t have enough rental stock so we expect to see more record highs this year.”

Mr Clancy said Wellington City also shuffled back slightly, with a median weekly rent of $590 a week, down $5 from January 2019, but still an 11.3 per cent increase on February 2018. “It’s good for Wellington City tenants that rents are cooling a little, but they’re still paying significantly more than their Auckland City cousins.”

The most popular rental in Wellington was a two-bedroom house in Stokes Valley, receiving 82 enquiries in the first 2 days onsite.

Table 4: Wellington’s most popular rental listings in February 2019

National rents jump

New Zealand’s national median weekly rent remained at January’s record high of $495 in February, up 5.3 per cent year on year.

Across the country the number of properties available for rent in February was down 7 per cent on February 2018, and the number of enquiries on property for rent was up 22 per cent.

“There are a number of factors which have created this off-kilter demand - these include first home buyers staying in rentals longer as saving a deposit is harder, and the fact that in many parts of New Zealand there aren’t enough houses.”

Around the regions

The regions were a mixed bag in February. In the South Island, the West Coast, Canterbury, and Otago all stayed flat while Marlborough was the only region to dip, down 4.7 per cent on February 2018 at $410 a week. The remaining regions all saw increases, with Hawke’s Bay the front-runner and increasing 10.4 per cent to $425.

All houses increase

All house sizes saw increases in median weekly rent compared to February 2018. Small houses (1-2 bedrooms) increased 9 per cent to $425, medium houses (3-4 bedrooms) were up 5.8 per cent to $550, and large houses (5+ bedrooms) increased 3.8 per cent to $830.

Large houses soared in Wellington with a jump of 24.2 per cent to $1,180 per week.

Urban properties continue their popularity

All urban property types saw an increase in median weekly rents. Apartments were up 4.3 per cent to $480, townhouses up 8 per cent to $540, and units up 5.3 per cent to $400.

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