Rents Soar For Small Properties

Tenants across Aotearoa are downsizing with growing demand and record-breaking rents for smaller abodes, according to the latest Trade Me Rental Price Index.

Trade Me Property Sales Director Gavin Lloyd said the March 2023 figures show rents for apartments and small houses (1-2 bedroom) were soaring. Nationwide the median weekly rent for an apartment was up 8 per cent year-on-year to $540 per week, while 1-2 bedroom houses saw a 4 per cent jump to $520 - both record highs.

"We're seeing a number of factors play out here," Mr Lloyd said.

"The ongoing cost of living means people are looking for cheaper places, allowing their paycheck to go further. Also the way people are living their life is changing - staying single for longer, or choosing to not have children, so they don't need the extra space.”

This was leading to a growing demand for apartments and small houses with demand up 55 per cent on the previous year.

The Garden City goes urban

The Christchurch rental market had a clean sweep of record highs across all of its urban properties: apartments, townhouses, and units, Mr Lloyd said.

“Ōtautahi has started to see more people move back to the city with the rebuild largely completed. There are more cafes and bars in the city, businesses coming back and inner-city property developments finished - giving Kiwi more reasons to live in the CBD again.”

The city saw a 29 per cent jump in demand for urban properties in March when compared with the year prior.

Rent’s still rising

The median weekly rent across the motu remained at $600 in March - a record high which was first hit in February. However, around the regions we saw a spread of new records set, Mr Lloyd said.

Rents in the Auckland region jumped to $650 - a $40 per week increase from 2022. Five more regions also reached record-breaking median weekly rents - Taranaki ($600), Southland ($430), Bay of Plenty ($640), Canterbury ($540) and Hawke’s Bay ($625).

When drilling down to the cities, the median weekly rent in Christchurch city hit an all time high of $525 - up $35 from the same time a year ago.

“Tenants are continuing to fork out more for rent, and when we couple that with the increasing cost of grocery bills and other daily expenses - it’s a tough time for renters in Aotearoa.”

Demand continues to outstrip supply

For the second month running, there has been a nationwide drop in supply - this time with a 13 percent decrease of listings onsite year-on-year, Mr Lloyd said.

“However, the regions were a mixed bag. The biggest dips we are seeing are in Auckland (-31%), Marlborough (-18%) and Southland (-13%).

“These drops were enough to ensure the average across the motu went down, but we did also see some significant jumps in supply. Nine of the 15 regions we monitor saw an increase in the number of rentals on offer when compared with 2022,” Mr Lloyd said.

“The biggest spikes were in Manawatu/ Whānganui (+44%), Nelson/ Tasman (+40%) and Northland (+28%).

“Demand for rentals continued to rise by 27 percent across the country. Otago (+46%) and Auckland (+44%) both streaked ahead as the most popular regions for tenants to be looking for a place to live,” Mr Lloyd said.

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