Rental Supply Spikes While Demand Dwindles

The number of properties listed for rent in New Zealand reached an all-time high last month, according to Trade Me’s latest Rental Price Index for May.

Trade Me Property Sales Director Gavin Lloyd said the number of rental listings across the country in May marked a 12 per cent increase when compared with the same month in 2021. “The spike was really carried by the main centres, with both the Auckland and Wellington regions seeing remarkable supply increases last month.”

Mr Lloyd said the Wellington region saw the largest increase in May, with supply jumping by a ‘whopping’ 45 per cent year-on-year to reach an all-time high. “Auckland also saw a record number of rental listings, up 16 per cent when compared with the same month last year.”

Marlborough was the only other region to see more rentals than ever before, up 24 per cent year-on-year in May.

Nationwide, demand for rentals on the other hand, fell by 8 per cent year-on-year in May. “The biggest drops in demand were seen in Nelson/Tasman (down 28%), Northland, and Taranaki (both down 19%).”

Mr Lloyd said Southland (up 8%) and Canterbury (up 21%) were the only regions to see demand for rentals climb when compared with May 2021.

“This mirrors what we saw in the property for sale market in May, with nationwide supply up 48 per cent year-on-year, while buyer demand dropped by 9 per cent.”

Rents drop for the first time this year

In May, the national median weekly rent fell by 1 per cent, when compared with the month prior to $575. “This marks the first month-on-month drop we have seen this year, and is $5 less than the all-time high national median weekly rent last recorded in April.

With more options than ever before and prices dropping, Mr Lloyd said it’s a great time to be looking for a rental property. “Over the past couple of years we have seen unparalleled price growth and consistently low supply, so last month’s changes will be music to the ears of Kiwi renters.

“However, if we look back to last year, May’s median weekly rent marks a 7 per cent jump when compared with the same month in 2021.”

Mr Lloyd said Waikato was the only spot to see a new all-time high median weekly rent last month, reaching $525. “The biggest year-on-year jumps were seen in Taranaki (up 16%), Northland, and Southland (both up 11%).”

Looking ahead, Mr Lloyd said the market might see changes later in the year. “The combination of increasing supply and dropping demand is going to be interesting going into the next few months. If this continues, we may well see prices tumble as landlords look to fill their rentals in a less competitive market.”

Auckland rents steady at $600

The Auckland region’s median weekly rent was $600 for the second row in the month in May, increasing by 2 per cent year-on-year. “When compared with the region’s record-high median weekly rent first recorded in January, this marked a slight drop of $10 per week.”

Mr Lloyd said the most expensive Auckland districts in May were Papakura ($650) and North Shore City ($640). “Rodney, Waitakere City, and Franklin all saw a median weekly rent of $600 in May.

“The most popular rental listing in the Auckland region last month was a three-bedroom house on Haverstock Road in Sandringham.” Mr Lloyd said the property had a weekly rent of $520 and received 379 watchlists in its first seven days onsite.

Wellington rents drop by 2% in a month

In the Wellington region, the median weekly rent rose 3 per cent year-on-year to reach $615 in May. “When compared with the month prior, however, this marked a drop of 2 per cent for the region.”

The highest median weekly rent in the region was seen in Porirua ($650), followed by Wellington City, ($620) and Kapiti Coast ($610).

“Last month's most popular listing in the Wellington region was a three-bedroom house on Wallace Street, Mount Cook. The $588-a-week property was watchlisted 194 times in its first seven days onsite.”

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