National weekly rent edges closer to $500

 

PHOTO: Trade Me Property

New Zealand’s national median weekly hit $495 in March after climbing 5.3 per cent on last year, as every region in the country experienced an annual increase in rent, according to the latest Trade Me Rental Price Index.

Trade Me’s Head of Rentals Aaron Clancy said the country’s rental market was looking very healthy and this was the first time in five months that every region in the country experienced a year-on-year increase. “There’s a high demand for rentals across the country with a significant 28 per cent increase in the number of enquiries compared to March 2018.

“Demand for rentals is very high right across the country, and in most places supply is not keeping up. From what we’re seeing renters are staying in their rentals longer while they get deposits together – in certain parts of the country home-ownership is moving beyond the means of many Kiwis.

“Unless the supply of rental properties can be increased, we’re only going to see rent prices climb in the future.”

Mr Clancy said the North Island had seen some significant increases with Gisborne, Hawke’s Bay and Manawatu/Whanganui experiencing the largest jumps in rent across the country. Nelson/Tasman, Southland and Hawke’s Bay reached record rents in March.

“The most popular rental property onsite in March was a three-bedroom house in Gate Pa, Tauranga with 97 enquiries in the first two days of being listed,” he added.

CGT impact

Mr Clancy said it will be interesting to see how the Government’s announcement that a Capital Gains Tax will not be implemented will affect New Zealand’s rental market. “Anecdotally, landlords have been saying they were nervous about what a Capital Gains Tax would look like and how it could impact their investments. If a Capital Gains Tax had been implemented on rental properties, we would have expected to see an influx of rental listings put on the market for sale.

“Now that the uncertainty has been removed, we should see more stability for tenant’s who are currently residing in a rental property.”

Wellington rental prices fall

“Tenants in Wellington will be pleased to know that the median weekly rent eased in March, falling from it’s peak in January at $550 to $525 in March. However, that’s still up 8.2 per cent on the year prior when the median rent was just $485 per week.

“Rental prices in Wellington City also cooled in March, shedding $10 from February’s high to $580 per week in March, up 9.4 per cent on last year.”

Mr Clancy added at $580 per week, Wellington City is still the most expensive city to rent in the country, closely followed by Auckland City at $570.

“Wellington rental prices typically peak in January and February each year when demand is at its highest, and prices then ease in the cooler months of the year. 2019 appears to be no different and we expect rental prices in the capital will continue to flatten out in the coming months.”

“The lack of rental properties in Wellington is a problem though, if demand continues to increase we may see an uncharacteristic jump in rental prices in the near future. March saw 17 per cent more enquiries on rental properties in the Wellington region than last year and the most popular rental in March was a two-bedroom house in Woburn, receiving 77 enquiries in the first two days onsite.”

Table 3: Wellington’s most popular rental listings in March 2019

Auckland rents remain at record high

“The median weekly rent in Auckland remained at a record $560 for a second consecutive month in March after climbing 3.7 per cent on last year.”

Mr Clancy said Auckland’s high house prices and growing population had resulted in 24 per cent more enquiries on rentals than March last year and that was keeping prices high.

“The most popular rental in the Auckland region was a two-bedroom house in Glenfield which had 79 enquiries in the first two days onsite.”

Table 2: Auckland’s most popular rental listings in March 2019

Rentals in Christchurch are in hot demand

Mr Clancy said rentals in the Garden City had seen a surge in demand. The median weekly rent in Christchurch rose 1.2 per cent on the year prior to $405 in March.

“Since the rebuild there have been a lot of rental properties on the market – supply was easily meeting demand. We’re now seeing a jump in demand which could see prices jump in the coming months.

“The number of properties listed for rent in Christchurch was down 18 per cent on the year prior while the number of enquiries jumped 48 per cent.”

Table 1: Christchurch’s most popular rental listings in March 2019

Large houses in Wellington the most expensive

“Large houses (5+ bedrooms) in Wellington are the most expensive property type in the country to rent after climbing 15.5 per cent to a new record at $1,155 – that’s $265 more per week than large houses in Auckland.”

Mr Clancy said the median weekly rent for small houses (1-2 bedrooms) saw the largest percentage increase nationally, climbing 9.1 per cent to $420 per week in March.

Apartments reach record

“The national median weekly rent for apartments hit a record high of $490 in March after a 4.3 per cent increase on last year. Kiwi’s have not always loved apartments, they were seen as a poor substitute for the quarter acre paradise but with rising rental prices across the country, many Kiwis are opting for urban properties such as apartments, townhouses and units which is driving prices up.”

Mr Clancy said townhouses, units and apartments were popular across the country and units had seen the largest year-on-year increase nationally.

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Trade Me Press Release