Tenants outside New Zealand’s three major cities are facing record rents after the median rent rose 10.5 per cent on last year to an all-time high of $420 per week in August, according to the latest Trade Me Rental Price Index.
The national median weekly rent was up 6.7 per cent on last year, and remained at a record high of $480 for a third consecutive month.
Trade Me’s Head of Rentals Aaron Clancy said outside Auckland, Wellington and Christchurch, the rental market was running hot during one of the coldest months of the year. “In August we typically see rents slow right down as we hit the seasonal winter slump, but this year the provincial rental market has bucked that trend, indicating that we’re headed for record rents this summer.”
Mr Clancy said a dip in the number of rental listings onsite and tenants trying to get ahead of the summer rental rush were driving this increase. “We’ve seen a 3 per cent drop year-on-year in the number of rental properties across the country and after last summer’s madness some tenants are making a move now to avoid risking a costlier rental in summer.
“Every region in the country saw an annual increase in August and three regions reached record weekly rents. Hawke’s Bay led the pack with a 13.9 per cent bump to a new record of $410. Waikato also hit a new high after climbing 7.8 per cent on last year to $415, along with Otago which shot up 9.8 per cent to an all-time high of $450.”
He said tenants across the country are pouncing on rental properties quickly. “One example is a property in Castor Bay, on Auckland’s North Shore receiving a massive 93 email enquiries in its first two days onsite.”
Auckland rents remain high
Mr Clancy said the median weekly rent in Auckland remained at a record high $550 for the fifth month in a row, up 3.8 per cent on last year. “Over winter demand has kept prices high and we’re watching with interest to see what they’ll do in summer. We suspect they’re going to jump to new heights in the New Year.”
Mr Clancy said the number of enquiries in the first two days onsite was up 11 per cent in Waitakere City and up 17 per cent in Manukau City year-on-year. Auckland City and North Shore saw a reduction in enquiries, falling 1 per cent and 6 per cent respectively.
Table 1: Auckland’s most popular rental listings in August 2018
|Rental address||Suburb||Enquiries in first 2 days|
|1||Seaview Road||Castor Bay||93|
Wellington rents rise ahead of summer rush
“The median rent in Wellington rose a solid 8.9 per cent on last year to $490 per week in August as the rental market begins to heat up well ahead of the summer rush. Historically, we’ve seen rent in Wellington start to increase as we get closer to summer, but this year it has started earlier.
“Wellington’s average weekly rent is just $10 shy of the record $500 it hit in January this year, so we expect it will well and truly break through that ceiling before the end of the year if demand continues like it has.”
Mr Clancy said Hutt Valley continues to be the hot favourite in the region, with the median weekly rent in Lower Hutt climbing 16.4 per cent on last year to a record $480 in August, and an 11 per cent bump in the average number of enquiries in listings’ first two days onsite.
“Wellington’s most popular rental in August was a two-bedroom townhouse in Crofton Downs which had 51 enquiries in its first two days onsite,” he added.
Table 2: Wellington’s most popular rental listings in August 2018
|Rental address||Suburb||Enquiries in the first 2 days|
|1||Admiraldy Street||Crofton Downs||51|
Rents in Otago reach all-time high
Mr Clancy said the median rent in Otago shot up 9.8 per cent on last August to a new record of $450 per week.
“As we expected, rents in Otago peaked in August, but they should settle now that the university flat scramble is over. In Dunedin, rents were up 11.3 per cent on last year to $445 per week in August, with 12 per cent more views on rental listings in the first two days onsite than last year.”
Small houses prove popular
Mr Clancy said all house sizes across New Zealand saw an annual increase in median rent in August with small houses (1-2 bedrooms) climbing 5.6 per cent to $390 per week.
Table 3: Median weekly rent by property size & region: August 2018 vs August 2017
“There is some good news for Auckland tenants. The rate of growth for medium houses (3-4 bedrooms) in Auckland has slowed with the median weekly rent up 1.7 per cent annual to $600.”
Urban properties hit a new high
Mr Clancy said the median weekly rent for urban properties (units, townhouses and apartments) reached a new high in August of $440, up 4.8 per cent on last year.
“When we look closer, across New Zealand units were up 8.3 per cent to a new high of $390 and apartments also reached a new high of $480, up 4.3 per cent on last year. Units have been growing in popularity in Hawke’s Bay with the median weekly rent for units increasing by 23.6 per cent year-on-year to a new record of $340 per week.,” he said.
Table 4: Median weekly rent by property size & region: August 2018 vs August 2017
About the Trade Me Property Rental Price Index: