PHOTO: Trade Me spokesperson Casey Wylde. SUPPLIED
Rents remain stable for second consecutive month in May
Rental prices have once again remained unchanged in May, according to Trade Me’s latest Rental Price Index.
The index reveals that the median weekly rent in Aotearoa remained stable in May at $650. This follows a strong uptick in rental supply, up 26 per cent in May when compared with a year ago.
Demand has also continued to fall, down 30 per cent when compared with the same time last year.
Trade Me Property Sales Director Gavin Lloyd said the change in market dynamics with increasing supply and reducing demand meant prices could expect to stay flat for a period.
“It’s been painful for renters in recent years. Following record-high rents, it looks like we’re finally seeing some much needed supply being injected back into the rental market. That’s taking pressure off for those looking for a rental, with more options available.”
Auckland was once again the most expensive region to rent, rising slightly by 1.5 per cent to $690. Rents in Auckland City however remained stable at $650, in line with the national median. Lloyd added that some regions had actually seen rents fall. “The Bay of Plenty, Taranaki, Wellington and Otago stand out with negative growth in rent prices month to month.”
<
p dir=”ltr”><img class=”CToWUd a6T” tabindex=”0″ src=”https://lh7-us.googleusercontent.com/docsz/AD_4nXfnAcFVoeh0xdCjAKOgTrHqUoa0ZIG0xm7RozLQy5TXzCzGUozuVDgrH34V-r0dl0SHKNpn2QtuJ5Y441pVADdzm_KsQyxjCw_1iu9TYkK-Oz40gqc4uioiMRTgwL_J6ShtoONd_ZbMe8SPz8KqXyaGh0yq?key=EOwHT0aLWX2qBbdpY1GAeA” alt=”The image is a map of New Zealand displaying the Rental Price Index for May 2024 compared to April 2024. The map highlights percentage changes in rental prices across different regions, along with a table listing the Rental Price Index values in dollars for each region. Key details include:
• Auckland: $690, 1.5% increase
• Bay of Plenty: $680, -1.4% decrease
• Canterbury: $575, 0.9% increase
• Gisborne: n/a
• Hawke’s Bay: $650, 1.6% increase
• Manawatū / Whanganui: $550, 1.9% increase
• Marlborough: $640, 0.0% change
• Nelson / Tasman: $595, 4.4% increase
• Northland: $600, 1.7% increase
• Otago: $600, -1.6% decrease
• Southland: $470, 0.0% change
• Taranaki: $620, -4.6% decrease
• Waikato: $580, 0.9% increase
• Wellington: $650, -3.0% decrease
• West Coast: n/a
The overall month-on-month change is 0.0%, with Auckland’s exclusion also resulting in a 0.0% change. The map uses various colours to indicate the percentage changes in different regions, with specific regions and their percentage changes labelled.” width=”585.0876671619613″ height=”394.0200226698074″ data-bit=”iit” />
Rental demand plummets
Demand for rental properties fell in May for the seventh consecutive month, down 30 per cent when compared with the same time last year.
“While we do usually see demand taper off going into winter, this May represents a 30 per cent drop compared with May last year, so these changes aren’t solely seasonal,” said Mr Lloyd.
He explained that there were a multitude of other factors affecting demand. “There’s been a lot of change in the economy in recent months. We’ve recently seen a pretty significant outflow of Kiwi overseas with record high emigration. Property prices have also been declining, and there’s likely some renters becoming first-home-buyers.”
“And of course we’re seeing household incomes falling in real terms with the cost of living pressures, and we’re continuing to see both public and private sector job cuts ripple through the economy. Moving house is a pretty costly exercise so with less income, more tenants are opting to stay put,” he added.
<
p dir=”ltr”><img class=”CToWUd a6T” tabindex=”0″ src=”https://lh7-us.googleusercontent.com/docsz/AD_4nXfBfdZt6oKgLYuA_w4tzJJmu2l9QX7sQB6IGuSeQA-LfjVju7Qo315uCYAfIJPUnYdA5nsEPv_JDO4Z7vmjjimaUl8WDHCS09RfBq9I6ZBVgjCz3iTjZXM7vXHKgu975drkilrVSpTMH4F7IMjJ1FTHqzAb?key=EOwHT0aLWX2qBbdpY1GAeA” alt=”The image is a table showing the Rental Price Index (RPI) for urban properties in various regions of New Zealand for May 2024. The table is divided into four categories: All Urban Property, Apartments, Townhouses, and Units. Each category shows the rental price in dollars and the percentage change.
All Urban Property
• New Zealand: $570, 3.6%
• New Zealand excl. Auckland: $540, 8.0%
• Auckland: $610, 5.2%
• Wellington: $595, 2.6%
• Christchurch: $530, 7.1%
Apartments
• New Zealand: $560, 1.8%
• New Zealand excl. Auckland: $545, 2.8%
• Auckland: $580, 1.8%
• Wellington: $590, -0.8%
• Christchurch: $495, 0.0%
Townhouses
• New Zealand: $660, 4.8%
• New Zealand excl. Auckland: $600, 6.2%
• Auckland: $720, 2.9%
• Wellington: $685, 5.4%
• Christchurch: $550, 4.8%
Units
• New Zealand: $510, 6.3% (Record High)
• New Zealand excl. Auckland: $475, 5.6%
• Auckland: $560, 5.7%
• Wellington: $520, 5.1%
• Christchurch: $455, 1.1%
The table highlights that the rental price for units in New Zealand has reached a record high. The values are color-coded in blue for easy differentiation.” width=”602″ height=”336″ data-bit=”iit” />
Marlborough, Otago outliers with double-digit rent hikes
Despite the national median rent staying flat, rents still rose at staggering rates in some parts of the motu. Compared with May last year, rents in Otago rose by 11.1 per cent and by 26.7 per cent in Marlborough.
The rent increase in Otago was driven by the Queenstown-Lakes district, up 19.3 per cent year on year to a median weekly rent of $895. Lloyd helped provide some context: “We do tend to see rents fluctuate in the Queenstown-Lakes district due to seasonal and local economic factors. The median rent in the district has actually fallen by $55 compared with April.”
Meanwhile in Marlborough, the median rent for May represented a $135 rent hike compared with a year ago. “That’s over $7,000 a year extra that tenants will need to find,” Lloyd commented.
However, he added that while these numbers will be concerning for tenants in these regions, they were following the national trend of increasing supply and falling demand.
“Places like Queenstown have historically had a notable mismatch between supply and demand. It looks like the markets in the Otago and Marlborough regions have a bit more catch up to do compared with the rest of Aotearoa, so we should hopefully see prices here begin to follow the national trend soon.”