Tenants under pressure amidst record-breaking rents

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.

Renters across the country will be feeling the pinch after the national median rent increased for the first time since December, up 3.4 per cent on last year to a record-breaking $460 per week, according to the latest Trade Me Property Rental Index.

Head of Trade Me Property Nigel Jeffries said this increase has been driven by a lack of available rentals. “Supply simply cannot keep up with the demand we are seeing and it’s rare for rental properties to be coming on and off the market so quickly.

“We distinguish between ’total rentals’ which are the number of listings we see onsite each month, and ‘available rentals’ which is the number of rental listings onsite at the end of the month.

“In November, total rentals were only down 15 per cent on last year, but available rentals were down a staggering 49 per cent. We’re seeing rentals are being listed for a very short time as fierce demand means landlords can have their houses listed and then tenanted in record time.

“While we did see rent rises around this time last year, the market is much tighter this year and the coming months are not looking good for flat-hunting Kiwis.”

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Wellington tenants feel the pinch

“Wellington renters are under the most pressure as we head into the New Year with the median weekly rent up 8.7 per cent on last November to $470 per week,” Mr Jeffries said.

He said that while the number of available properties in the capital city was down 71 per cent at the end of November, the number of total rental listings that came on to the market in November was only down 11 per cent on last year.

“We are seeing a growing number of enquiries on Wellington rental listings within just hours of appearing onsite as Wellingtonians battle to secure a flat. In November, a two bedroom property in Mt Cook received 33 enquiries in the first 3 hours of being listed.”

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Auckland holds strong

Mr Jeffries said the median weekly rent in Auckland rose 1.9 per cent on last year to $530 per week. “While available stock in the Super City is down 35 per cent on last year, it is a drop in the ocean compared to the rental shortage in Wellington. However, as we head into the New Year and university students prepare to flood the Auckland rental market, some large rental increases could be in store for the Super City.”

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Christchurch bucks the national trend

Mr Jeffries said that while the rest of the country is experiencing record breaking rents, Christchurch was bucking the national trend, dropping 1.3 per cent on last year to $390 per week.

“Thanks to the rebuild, Christchurch is one of very few places in the country where the supply of rental properties is in good shape. Demand in the Garden City remains strong but we’re not seeing  much price movement at the moment which is welcome news for tenants.”

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Rent rises in the regions

“All but one of New Zealand’s 15 regions saw rent increases year-on-year with six regions experiencing double-digit growth,” said Mr Jeffries.

Marlborough saw the biggest jump, up 23.5 per cent on last November from $340 to $420 per week, followed closely by the West Coast which was up 22 per cent to $288. Rentals in Whanganui climbed 12 per cent to $320 per week and Hawke’s Bay rose 11.8 per cent to $380 per week.

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Rents for medium houses reach new high

“The median weekly rent for medium houses (3-4 bedrooms) reached a new record in November, up 5.4 per cent on last year to $517,” said Mr Jeffries.

Mr Jeffries said this was led by medium houses outside of Auckland which jumped 7.1 per cent on last year to a record $450 per week.

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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

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