Landlords looking to recover yield

The national median rent rose to $420 per week.

Head of Trade Me Property Nigel Jeffries said the rental market was stable and relatively quiet throughout 2014 but looked to be sparking into action.

"The 9% year-on-year increase in January is the largest single-month rise we've recorded over the past five years. Median weekly rents clicked up $20 per week between December and January to a record high of $420 per week. That's grim news for tenants."

Jeffries said the rental market was responding to pressure from landlords chasing better yields for investment property as a function of relentless growth in property prices.

"It was more a question of when, not if, landlords were going to start recovering some level of yield. It looks like that signal has flowed into the market this month and started to sting tenants in the pocket."

Eight of the 15 regions surged to new record median rents, and another four regions reported increases compared to a year ago.

The largest increase was in the Marlborough region where median weekly rents were up 13.3% year-on-year to $320 per week.

Only two regions recorded falls in median weekly rent: Gisborne was down 6.7% to $260 per week, and the West Coast was down 1.9% to $255 per week. Nelson/Tasman was unchanged.

Auckland, Wellington and Canterbury all reached new high-tide marks for median weekly rent. Auckland was up 6.7% to $480 per week, Wellington landed at $440 per week (up 6% ), and Canterbury was up 8.4% to $450 per week.

Medium-sized properties continue to show rental strength with three and four-bedroom properties rising to a median of $460 per week, up 9.5% on a year ago.

Jeffries said there was also noticeable strength around asking rents for five-bedroom homes which reached a new record high of $700 per week, up 7.7% on a year ago. Auckland led the sector, hitting a new high of $750 a week and up 7.1% compared to January last year.

The Christchurch market is showing clear signs of diminishing price pressure. "Although the headline rent for all properties in the city was up 5.9%to $450 per week, this does not represent a record high," Jeffries said. "And across the city, smaller homes and five-bedroom homes both showed falls in weekly rents compared to a year ago."

Jeffries said the Auckland apartment market was showing solid rises in asking rents. In January, the weekly rent rose by $10 to a new high of $430 per week, up 7.5% a year ago.

In the Christchurch market the rents for more compact living options bucked the trend of traditional homes, with significant rises in apartment rents (up 14.4% to $378 per week) and units now renting at an all-time high of $340 a week (up 6.3%).