Wellington ended 2018 as the most expensive city in the country to rent after the median weekly rent in the capital city climbed 8.2 per cent year-on-year to reach an all time high of $565, according to the December Trade Me Rental Price Index.
Head of Trade Me Rentals Aaron Clancy said rental prices typically dip in December as Kiwis head off on their summer holiday, however, that was not the case for the capital as some tenants tried to beat the rental rush. “Tenants in the capital have become accustomed to the annual rental madness that hits the region around January and February, this year it appears many tried to beat the rush and secure a property before 2019 had even begun.”
Mr Clancy said with growing demand for rental properties in the Wellington region, and tight supply, there will be more record-breaking rents to come. “As house prices in the capital continue to rise, more Kiwis are having to stay in their rentals longer to save for a deposit and this is driving demand.
“In December, the number of rental properties in Wellington fell 7 per cent on the year prior and we’ve seen a 15 per cent increase in the average number of enquiries. This supply vs demand equation is pushing rents up really quickly and there isn’t any relief in sight for now. We’re already seeing huge demand and interest in rental properties across the first few weeks of 2019.
“Tenants in the capital city can now expect to pay $780 more a year than those in Auckland but while rents in Wellington soared in December, Auckland remained stagnant at $550 per week.”
Mr Clancy said the wider Wellington region was in slightly better shape but the median weekly rent had reached a new record of $520 after climbing 8.3 per cent on the year prior.
“Tenants planning to move out of the city to the likes of Lower Hutt or Porirua for better rents are likely to find it easier than central Wellington but demand is still very high right around the region. A property in Wainuiomata, typically a very quiet suburb for rents had 95 enquiries in its first two days on Trade Me.
“The most popular rental in December was a two-bedroom house in Newtown which had 137 enquiries in the first two days onsite.”
Table 3: Wellington’s most popular rental listings in December 2018
|Rental address||Suburb||Enquiries in first 2 days|
|The Parade||Island Bay||98|
National rent remain stable
Mr Clancy said the national median weekly rent remained stable for the fifth month in a row at $480, up 4.3 per cent on the year prior.
“If we take a closer look at the regions, the median weekly rent in the Bay of Plenty (up 9.1 per cent to $480), Manawatu/Whanganui (up 16.7 per cent to $350), Marlborough (up 6.5 per cent to $450) and Southland (up 10.3 per cent to $295) all reached new records in December as the rental market in the provinces heated up.
“The only region which didn’t see an increase in December was Nelson/Tasman which was down 2.4 per cent on December 2017.”
Auckland rents stablise
Mr Clancy said the Auckland rental market remained relatively stable in the last month of 2018.
“Auckland experienced the usual seasonal lull in December as Aucklanders headed off on holiday, however, with a huge number of tenancies up for renewal in the first few months of the year and the annual influx of students coming back to the city for University, we expected to see some big jumps in rent in the coming months.
“Rents in Auckland city were unchanged on the year prior at $550 per week while the median weekly rent for the Auckland region was up 3.8 per cent year-on-year to match the city at $550.”
Mr Clancy said a medium (3-4 bedroom) house in Papakura and a small house (1-2 bedrooms) in Howick were tied for the most popular Auckland rental in December, both receiving 49 enquiries in the first two days onsite.
Table 2: Auckland’s most popular rental listings in December 2018
|Rental address||Suburb||Enquiries in first 2 days|
|George Street||Mount Eden||48|
Large houses in Wellington plummet
Mr Clancy said while large houses (5+ bedrooms) in Wellington dipped 18.2 per cent year-on-year, they are still the most expensive house type in the country at an “eye-watering” $900 per week.
“Small (1-2 bedrooms) and medium (3-4 bedrooms) houses in Wellington, on the other hand, saw the largest increase up 8.2 per cent and 10.3 per cent respectively. Medium houses were the hot favourite across the country, climbing 7 per cent to $535.”
Table 4: Median weekly rent by property size & region: Dec 2018 vs Dec 2017
Apartments, townhouses and units on the rise
“The median weekly rent for apartments, townhouses and units increased 2.4 per cent across the country and were particularly popular with Wellingtonians in December, climbing 6.8 per cent.
“In the coming months, with rents expected to rise in Auckland and Wellington, we will likely see big jumps in these types of properties which are often a cheaper alternative to a typical Kiwi flat.”
Table 3: Median weekly rent by property size & region: Dec 2018 vs Dec 2017
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.