Tenants around the country are facing tough competition and increasing rents after the number of enquiries on rental listings rose 17 per cent nationwide in the last year, according to the latest Trade Me Rental Price Index.
Trade Me Property’s Aaron Clancy said with rentals in hot demand, the national median rent rose 3.1 per cent on last year to $495 per week and some regions experienced significant annual growth.
“It’s classic supply and demand, if the supply of rental properties can’t keep up with the demand then prices invariably start to rise. In many parts of the country demand is easily outstripping supply and we’re seeing rent increases.
“Looking across the regions, the strongest demand increase was in Gisborne where the number of enquiries jumped a staggering 54 per cent on the year prior. Otago saw demand for rental properties spike 44 per cent while enquiries on rentals climbed 41 per cent in Bay of Plenty.
“As property prices continue to increase across New Zealand, people are renting longer than they have in the past, some parts of the country like Wellington are growing considerably too. This is driving demand in the rental market which means more competition and rising rents.
“In September the median weekly rent in Manawatu/Whanganui hit a record of $380 per week after a 15.2 per cent jump. Rents in the West Coast also reached a new high of $350 per week after a significant 25 per cent annual increase.”
Mr Clancy said the New Year would likely bring more record breaking rents across New Zealand. “Rents are only going to increase as more tenants do the traditional ‘summer shift’ as their tenancies come up for review and university students come to town.”
Demand in Palmerston North jumps 50 per cent
“Tenants in Palmerston North are under pressure and rentals are hot property after the number of enquiries jumped 50 per cent on last year.
Mr Clancy said the number of rentals in the area fell 4 per cent on September last year.
“With rising demand and falling supply, it’s not surprising that the median rent in Palmerston North hit a new record in September up 18.6 per cent on last year to $415 per week.”
Mr Clancy said all sizes and types of rental properties in Palmerston North saw an increase in median weekly rents. “Medium properties (3-4 bedrooms) had a strong year-on-year rent increase with the median weekly rent jumping 13 per cent or $50 on last year to $440 per week. Rent for small properties (1-2 bedroom) rose 11 per cent on last year to $300 per week.”
Wellington rents rising
“Wellington was the stand out performer of the main centres in September after the median rent in the region rose 10.4 per cent to $530 per week.
“Taking a closer look at the region, rents in Wellington City are edging closer to the $600 mark after the median weekly rent rose 9.4 per cent on last year to $580 in September. Rents in Lower Hutt rose 11 per cent on the year prior to $500 per week, Masterton experienced a 10 per cent jump to $385 and rents in Upper Hutt rose 8.4 per cent to $450 per week in September.”
Mr Clancy said tight supply was forcing Wellington tenants to dig deep into their pockets. “The number of Wellington properties available for rent was down 5 per cent on last year while the number of enquiries across the region rose 4 per cent on September 2018.
“Tenants in Wellington could be in for a rough summer of record breaking rents. We’ve seen prices in the Capital rise steadily throughout the year and summer is an extremely busy time in the region’s rental market, record breaking rents are very likely in the New Year.”
The most popular Wellington rental in September was a two-bedroom house in Fairfield, Lower Hutt that had 90 enquiries in the first two days onsite.
Wellington’s most popular rental listings in September 2019
|Rental address||Suburb||Enquiries in first 2 days|
Auckland rents on ice
Mr Clancy said Auckland rents remained flat year-on-year with the median weekly rent stagnant at $550 per week.
“The median weekly rent in Auckland has hovered around the $550 mark for the last 12 months as the rental and for sale market in the region cooled.”
Mr Clancy said the most popular rental property across New Zealand in September 2019 was a two-bedroom house in Papatoetoe which had 112 enquiries in the first two days onsite.
Auckland’s most popular rental listings in September 2019
|Rental address||Suburb||Enquiries in first 2 days|
|2||Mount Wellington Highway||Mount Wellington||71|
|3||St Johns Road||Meadowbank||68|
Small houses see big rent boost
“Small houses (1-2 bedrooms) across New Zealand saw the largest rent increase of any house size in September after a 7.9 per cent increase to $410 per week.”
Mr Clancy said out of the three main centres, Wellington saw the biggest rent increase across all house sizes with rent for large houses (5+ bedrooms) soaring 16.6 per cent to $880 per week.
Median weekly rent by property size & region: September 2019 vs September 2018
Townhouses flavour of the month
“Townhouses were the flavour of the month for tenants in September with the median rent climbing 4 per cent nationwide to $520 per week.
Mr Clancy said across the country all urban property types (apartments, townhouses and units) saw an annual increase in rent.
“The largest increase was for apartments in Wellington which rose 6.3 per cent to $510 per week in September.”
Median weekly rent by property type & region: September 2019 vs September 2018
About the Trade Me Property Rental Price Index:
This report provides a comprehensive monthly insight into the rental market covering price trends by type and size of property across New Zealand. The index is produced from Trade Me Property data of properties that have been rented in the month by property managers and private landlords. On average over 11,000 properties are rented each month and the report provides a comprehensive insight into this part of the property market for tenants, landlords and investors. The index is calculated using the median rent in the month, this being an accurate statistical assessment of the current rent being charged by landlords and property managers.