Rents show biggest annual increase in over two years

PHOTO: Trade Me Property Sales Director Gavin Lloyd

New Zealand rents saw the largest year-on-year increase in two and a half years in March, growing by 6 per cent to $540 per week, according to the latest Trade Me Rental Price Index.

Trade Me Property Sales Director Gavin Lloyd said the national median weekly rent in March matched the all-time high that was first recorded in January. “This is the first time we’ve seen a year-on-year percentage increase of 6 per cent since October 2018.

“We’re not seeing any let up in the foreseeable future either – demand is high and supply isn’t keeping up. Chances are the record high national rent price will be broken in the near future.”

Mr Lloyd said every region across the country saw its median weekly rent increase in March when compared with the same month last year. “The biggest increase was seen in Hawkes Bay (13.8%), with rents in the region reaching an all-time high of $535. Close behind were the year-on-year increases seen in Taranaki (12.5%) at $450 and Manawatu/Whanganui (10%) at $440.”

Nationally Mr Lloyd said demand was up by 28 per cent last month when compared with March last year, while supply was up by 17 per cent. “After two consecutive months of supply outweighing demand, we saw the tables turn in March, with demand once again overtaking supply and putting pressure on the market, causing rental prices to climb.”

Looking around the regions, Mr Lloyd said demand increased across the board with the exception of Gisborne. “Manawatu/Whanganui and Nelson/Tasman both saw March demand increase by 50 per cent when compared with the same month last year, while Bay of Plenty (49%) and Northland (47%) demand increases were not far behind.”

Mr Lloyd said the rental market could see an impact from the Government’s housing policy changes announced last month “Some economists are predicting rents will rise as a result of changes to property investment rules, but it’s still too early to see if this is the case and we may even see rents cool off in the coming months as we enter the quieter winter period.”

Auckland City rents remain stagnant

Compared with national price growth, the Auckland region saw a slower year-on-year increase in March. “In the Auckland region, the median weekly rent increased by 2 per cent year-on-year, to $590, last month.

“Looking at Auckland City, the median weekly rent continued its lag, dropping by 3 per cent when compared with the same month in 2020, to $560. We haven’t seen the Auckland City median weekly rent increase year-on-year since May 2020 thanks to an increase in supply.”

The number of available rentals in the Auckland region was up by 32 per cent year-on-year in March while demand was up by 26 per cent. “The most expensive districts in the region were North Shore City ($635), Rodney ($625), and Manukau ($600).”

Auckland’s most expensive districts in March 2021 (* new record)

District	Median weekly rent
North Shore City	$635*
Rodney	$625
Manukau	$600

“Last month the most popular rental listing in Auckland was a two-bedroom house on McDougall Street in Manurewa East, Manukau City for $395 a week. It received 64 enquiries in its first two days onsite.”

Wellington rents up 5 per cent on last year

The median weekly rent in the Wellington region increased by 5 per cent year-on-year to $590 last month, while in Wellington City it increased by 2 per cent to $600.

Mr Lloyd said Porirua rents overtook Wellington City once again in March, making it the most expensive district in the country. “As we first saw in July last year, and then again a number of times since, the median weekly rent in Porirua was more expensive than rents in Wellington City in March.”

Wellington’s most expensive districts in March 2021

District	Median weekly rent
Porirua	$650
Wellington City	$600
Lower Hutt	$580

Demand for rentals in the Wellington region was up by 20 per cent last month when compared with March 2020, while supply was up by 12 per cent year-on-year.

“The most popular rental in the country last month was a two-bedroom townhouse on Kingsley Street, Stokes Valley, Lower Hutt for $495 per week. The property received 89 enquiries in its first two days onsite.”

Urban property rents increase by 2% year-on-year

Mr Lloyd said the national median rent for townhouses and units saw year-on-year increases in March. “Apartments, on the other hand, saw a decrease with the median weekly rent dropping by 3 per cent when compared with last year.”

Small houses see record-high rents

Nationally small houses (1-2 bedrooms) saw a record median weekly rent of $465 in March. “Both medium (3-4 bedroom) and large (5+ bedroom) rentals also saw median weekly rents increase by 5.3 per cent in March when compared with the same time last year.”