Tenants in the capital are facing record breaking rents after the median weekly rent in Wellington City cracked the $600 mark for the first time ever in December, according to the latest Trade Me Rental Price Index.
Trade Me Property’s Aaron Clancy said rents in Wellington City have been rising the fastest out of our main centres after jumping 6.2 per cent or $35 a week when compared to December 2018.
“Tenants are rushing to find a rental in the capital and the number of enquiries for Wellington City rentals rose 8 per cent on the year prior as many tenants spent their summer holiday looking for a new place to live.
“The Wellington region is the most expensive in the country at a record breaking $580 per week and the number of enquiries we are seeing on rental properties in the area is extraordinary.
“When we take a closer look at the region, traditionally quieter areas like Upper Hutt, Porirua and Kapiti Coast are seeing huge increases in enquiries.” Mr Clancy said demand for rentals in Upper Hutt and Porirua rose 21 per cent year-on-year, while South Wairarapa saw an 80 per cent jump in enquiries and rentals in Kapiti Coast saw 16 per cent more enquiries than the year before.
Mr Clancy said while tenants are facing record breaking rents and plenty of competition in Wellington, there is some good news after the number of Wellington rentals onsite rose 10 per cent year-on-year. “Unfortunately, however, this increase in supply doesn’t look like it will meet the huge demand in the region. We expect to see rents climb steeply throughout January, February and March of this year.”
“The most popular rental property in New Zealand in December 2019 was a two-bedroom house in Mount Victoria going for $550 per week, which had 95 enquiries in the first two days onsite.”
Wellington’s most popular rental listings in Dec 2019
|Rental address||Suburb||Enquiries in first 2 days|
|1||Home Street||Mount Victoria||95|
|2||Ghuznee Street||Te Aro||77|
|3||Elizabeth Street||Mount Victoria||74|
Mr Clancy said in December the median weekly rent in Porirua rose 8.2 per cent to $595, Lower Hutt saw rents climb 14.6 per cent to $550 and Upper Hutt was up 8.3 per cent to $520. Masterton saw an ‘eye-watering’ 23 per cent jump to $430 and Kapiti Coast was up 9.1 per cent to $480 per week.
Demand in Auckland jumps 20 per cent
Mr Clancy said Wellington wasn’t the only region to experience a significant increase in rental enquiries.
“We’re seeing fierce demand for rentals in Auckland with the number of enquiries rising 20 per cent on the year prior. The number of rentals on the market in the City of Sails is struggling to meet demand with listings up just 1.5 per cent year-on-year.”
Mr Clancy said the median weekly rent in Auckland remained at its all time high of $560 per week for the third consecutive month in December following a 1.8 per cent annual increase.
“So far landlords aren’t responding to the high demand with higher rental prices but if demand continues like this we think rents will climb over the next few months.”
“The districts with the highest median weekly rents are North Shore City, Auckland City, Manukau City and Rodney.” North Shore City reached a median weekly rent of $600 in December after a 2 per cent annual increase. Auckland City also saw rents rise 2 per cent to $560 per week along with Manukau City which reached a median weekly rent of $560 after a 2 per cent annual increase. Rodney reached a median weekly rent of $560, up 5.7 per cent on December 2018.
“The most popular rental property in Auckland was a three-bedroom house which had 72 enquiries in the first two days onsite,” said Mr Clancy.
Auckland’s most popular rental listings in Dec 2019
|Rental address||Suburb||Enquiries in first 2 days|
|1||Titchener Street||New Lynn||72|
|3||Hutchinson Avenue||New Lynn||56|
National demand for rentals rises 17 per cent
“It’s not just Wellington and Auckland where rentals are in hot demand, right across the country we saw unusually strong demand in December when the rental market is typically pretty quiet.
“The number of enquiries on rental properties across the country was up 17 per cent on the year prior as many tenants decided to try and get ahead of the New Year rental madness by securing a property before Christmas.
“December is traditionally a relatively quiet month for the rental market with many tenants and landlords choosing to enjoy the summer break. However, we’re now seeing more Kiwis try and secure a rental earlier than before and beat the busy period we see from January through to March.”
Mr Clancy said it’s a simple case of supply and demand. “While demand is up 17 per cent on the year prior, supply was up just 4 per cent - that’s putting pressure on tenants and landlords know they can put up the price.”
Mr Clancy said the national median weekly rent climbed 4.2 per cent on December 2018 to remain at its $500 per week record.
“As we look ahead to the rest of the year, it’s not great news for tenants. With demand on the rise, we expect to see more record breaking rents across the country which will mean tenants will have to dig deep into their pockets to pay for rent each week.”
Rents increases in the regions
“Twelve of the country’s fifteen regions saw an annual rent increase in December with many experiencing strong double-digit growth.
“Southland and Nelson/Tasman saw the largest jumps after the median weekly rent rose 15.3 per cent to a new high of $340 per week and 13.4 per cent to a record $465 per week respectively. Rents in Northland and Taranaki also reached new highs of $450 and $425 respectively.”
Mr Clancy said Marlborough and West Coast were the only regions to buck the trend and see rents fall on December 2018. However, listings in Marlborough were relatively light in December.
Rent for all house sizes rise
“The median weekly rent across all house sizes increased when compared to December 2018 with the small houses (1-2 bedrooms) in Wellington experiencing the biggest jump, climbing 12.8 per cent to a new record of $485 per week.”
Mr Clancy said excluding the Auckland region, the median weekly rent for small houses reached a new high, after rising 8.6 per cent on last year to $380.
Median weekly rent by property size & region: December 2019 vs December 2018
Townhouses popular with tenants
“Townhouses were the stand out of all urban properties (apartments, townhouses and units) in December. The median rent for townhouses across the country rose a solid 7 per cent year-on-year to $530 per week.
“Urban properties on the whole are appealing to tenants and the median weekly rent for all urban properties hit a new high of $455 per week in December.
“There’s a lot to be desired about urban properties. They are often in a great inner-city location, can be cheaper to rent than a house and require a lot less maintenance.”
Median weekly rent by property type & region:December 2019 vs December 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.