Rising demand for rental properties across the country is making it tough for tenants and stock is struggling to keep up, according to the latest Trade Me Rental Price Index.
Head of Trade Me Rentals Aaron Clancy said they’d seen a 20 per cent increase in the number of enquiries on rentals nationwide in June while the national median rent remained at its all-time high of $500 per week for a third consecutive month. “We’re seeing an increasing interest for rentals but stock simply isn’t keeping up with the number of properties available for rent in June down 7 per cent on last year.”
“With rising house prices, some Kiwis are staying in the rental market longer than before to save for a house deposit. Also, with growing rents some tenants are staying put rather than look for a new rental in this tighter market. Unfortunately for anyone looking for a rental property, this is a perfect storm and as a result we’re seeing record rents, increased competition for properties and less stock.”
“The regions which are experiencing the largest increases in demand are Bay of Plenty with the number of enquiries up a “staggering” 47 per cent on last year. Enquiries in Southland had also jumped 45 per cent along with Manawatu/ Whanganui which rose 33 per cent and Canterbury up 32 per cent.”
Mr Clancy said we often see a lag between an increase in demand and rising rents which means it’s likely that landlords will lift rents if the demand continues to outstrip supply.
“With such high demand, rents have increased in many regions across New Zealand. In June, five regions saw strong double-digit growth and four reached new record rents. If demand continues like this we expect to see a lot more record rents over the coming months.”
Mr Clancy said Southland saw the biggest annual rent increase, rising 15.4 per cent to a record $300 per week. Otago (up 13.9 per cent to $450), Nelson/Tasman (up 11.4 per cent to $440) and Waikato (up 10 per cent to $440) also reached record median weekly rents in June.
Wellington rents rise $60 per week
“Renting in Wellington continues to get more expensive with the median weekly rent rising $60 per week on last year to $540 in June.
“Taking a closer look at the region, Wellington City has the highest median weekly rent at $575 after climbing 15 per cent on last year from $500. Rents in Porirua rose 3.8 per cent year-on-year to $545 per week along with Upper Hutt which jumped 11 per cent to $500 per week. The median weekly rent in Lower Hutt was $495 in June, up 6.5 per cent on last year.”
Mr Clancy said while demand for rentals in the region eased, up just 2 per cent on last year, the number of rental properties onsite dipped 11 per cent. “With less stock on the market and rising rents, tenants in the capital are having to dig deeper into their pockets.
“The little suburb of Waiwhetu in Lower Hutt had Wellington’s most popular rental in June. A property on Bell Road had 76 enquiries in the first two days onsite.”
Wellington’s most popular rental listings in Jun 2019
|Rental address||Suburb||Enquiries in first 2 days|
Demand for Auckland rentals rise
“While the median weekly rent in Auckland has been flat since the start of the year, the number of enquiries on rental properties in the Super City rose a solid 21 per cent on last June.”
Mr Clancy said with demand rising, we think tenants in Auckland could see some large rent rises on the horizon.
“Auckland had the most popular rental property in the country in June. A three-bedroom house for rent in Mount Eden had 99 enquiries in the first two days onsite.”
Mr Clancy said Auckland’s median weekly rent was $560 in June, up just 1.8 per cent on the year prior while the number of properties available to rent in the region was down 2.7 per cent.
“The areas with the highest median weekly rents in June were North Shore City, Auckland City and Rodney.” North Shore City’s median weekly hit $600 in June, up 3.4 per cent year-on-year. While Auckland City was $565, up 2.7 per cent and Rodney up 2.8 per cent on last year to $555.
Auckland’s most popular rental listings in June 2019
|Rental address||Suburb||Enquiries in first 2 days|
|1||Windmill Road||Mount Eden||99|
Demand for houses soars 62 per cent
“When we look at demand by property type, houses have seen a huge increase in the number of enquiries, rising 62 per cent on last year.
Mr Clancy said the median weekly rent across all house sizes increased year-on-year and rents for large houses (5+ bedrooms) saw the largest jump of 10.7 per cent year-on-year to $830.
“Rents for large houses (5+ bedrooms) in Wellington rose significantly in June, up 25.8 per cent on last year to $950 per week.
Median weekly rent by property size & region: Jun 2019 vs Jun 2018
Apartments in hot demand
Mr Clancy said the median weekly rent increased across all urban property types compared to June 2018 but apartments were the hot favourite.
“Demand for apartments, townhouses and units increased in June. Units saw the largest jump with the number of enquiries nationwide increasing 19 per cent in June. Apartments saw the number of enquiries jump 14 per cent while townhouses saw a 6 per cent bump in enquiries.
“The largest rent increase for urban properties was apartments in Wellington which rose almost 10 per cent to $515 in June.
Median weekly rent by property type & region: Jun 2019 vs Jun 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.