The Rent Price Index provides a monthly analysis of the rental property market across the country. This is based on the rent prices being sought in listings from the past month.
The cost of renting apartments, townhouses and units in New Zealand is now more expensive than ever as the median weekly rent increased by 6.3 per cent in the last year to $420, according to the latest Trade Me Property Rental Index.
Head of Trade Me Property Nigel Jeffries said urban properties (which are made up of apartments, townhouses and units), are proving popular with Kiwi renters for a number of reasons. “Urban properties are typically warmer, drier and in a better, inner-city location than your average house, and now tenants around the country can expect to pay a premium for them.”
Apartments have seen a surge in popularity with the median weekly rent increasing 20 per cent in the last three years to reach a new record of $460, costing tenants an additional $3,900 per year. Meanwhile the typical townhouse or unit is now $460 and $360 per week respectively.
Mr Jeffries said apartments continue to be a very popular option for many Aucklanders. “At $490 per week, Auckland apartments are at a record high, up 6.5 per cent year-on-year as increasing demand continues to push prices closer to that $500 threshold.”
He said renting an apartment in the Super City is now more expensive than a small house. “You’ll be expected to pay $40 per week less for a one or two-bedroom house and much of this is because apartments are generally in a great location for those who want to live and work in the heart of the city and dodge the traffic hassle.”
Mr Jeffries said urban properties have also become the hot favourite for buyers across the country. “As house prices steadily increase, more and more Kiwis have been looking at urban properties as a more affordable investment or first foot on the property ladder. Since 2014, the average asking price of an urban property has jumped 34.3 per cent to $533,600 to match the increasing demand.
“The priorities of Kiwi renters and landlords are changing, and the simplicity and location of an urban property holds a lot of appeal. This is a real change of mindset for a country that’s been obsessed with the quarter-acre dream for generations.”
National rents still in holding pattern
While urban properties have jumped 6.3 per cent, the national median weekly rent is up just 2.3 per cent on last year remaining at $450 per week for the ninth consecutive month.
“To date, we’re experiencing the lowest period of rent increases in five years with the annual rent growth up just 2.3 per cent,” Mr Jeffries said. “This is quite the contrast to 2016 when the annual rent growth was nearly double at 4.4 per cent.”
Auckland and Wellington stall
Mr Jeffries said tenants in our two biggest cities will be pleased that the rate of rent growth has eased as the median weekly rent in Auckland and Wellington remains flat.
“The Auckland rental market hasn’t seen any movement since April staying firmly at $530 per week and Wellington is also seeing a similar trend, stalling at $450 per week with no change since March this year,” he said.
Christchurch breaks $400 ceiling
Down in the South Island, Christchurch rentals continue to remain stable, up $10 per week since June to a median weekly rent of $400.
“Landlords in the Garden City will be hoping these early signs of stability in the rental market are a sign of things to come after a turbulent few years,” Mr Jeffries said.
Varied results in the regions
Mr Jeffries said regional New Zealand experienced “a mixed bag” in August.
“The West Coast saw the largest annual increase we have seen in a while, leaping up 28.6 per cent to $270. Meanwhile Otago reached a new high of $410 per week, up 5.8 per cent since July,” he said. Canterbury fell 1.3 per cent to $395 per week, along with Gisborne which saw a 19.4 per cent drop in median weekly rent to $270.
“Gisborne and the West Coast are small markets which can be susceptible to big swings off the back of relatively small changes in the quantity and quality of properties entering the market.”
Large houses hit new high
Landlords with large houses (5+ bedrooms) have plenty of reasons to smile after the median weekly rent climbed 7.1 per cent in the last year to $750. Tenants will be feeling the pinch with the average large house costing an additional $5,200 more a year than last August.
Christchurch tenants will be feeling it the most with a 7.4 per cent increase on last year to $725 per week.
About the Trade Me Property Rental Price Index
The Trade Me Property Rental Price Index is the first report to provide a timely and 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 therefore provides the most comprehensive insight into this critical part of the property market for tenants, landlords and investors. The rental price 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.
More info: For information about the differences between the Trade Me Property data and bond data collected by Tenancy Services, please read this post (How High is the Rent?) by Dr Lucy Telfar-Barnard from the University of Otago