Rent flatline continues

Wellington

The latest Trade Me Property Rental Index is out and it doesn’t herald good yield news for landlords.

It shows that the national median asking rent remained unchanged at $440 a week for a third consecutive month in September.

Head of Trade Me Property Nigel Jeffries said rents had remained static for a sustained period across the country.

The median asking rent has been stuck in a rut since April, with the only exception in June when it dipped to $430 per week, he said.

“Last month, median asking rents stubbornly refused to rise across New Zealand, including in the major regions. Tenants will be pleased with the extended breather, but landlords might be starting to scratch their heads.”

The index results mean that over the past year the weekly advertised rent has only risen by 4.8%, or $20 a week.

This trend was particularly pronounced in Auckland – where sky high asking prices highlight the disparity in sale and rent prices.

Jeffries said median asking rent in Auckland was “firmly locked” at $500 a week, and up only 0.2% on a year ago.

The Auckland market’s median asking rent has levelled out at $500 a week, a level it first reached in November, and it has remained unchanged for the previous couple of months, he said.

“Despite individual months rising to $520, it has settled down to an increase that equates to a $1 per week rise over the past 12 months.”

In Christchurch, the advertised median rent hasn’t changed for the past five month.

It continues to sit at $400 a week, which is down 7% on last year and means the Garden City is a tenant’s market.

However, the situation for Wellington landlords is somewhat brighter – although the city’s rental market remains heavily influenced by students and the university year.

Jeffries said student demand means Wellington’s median asking rents peak around January, before edging down slowly through winter, and then the cycle repeats again heading into summer.

Despite this pattern, the incremental year-on- year increase was significantly greater than previous years, he said.

“In September, the median asking rent was $410 per week – a small fall of $10 a week on last month, but the underlying year-on- year growth was up 7.9%.

“This equated to an annual increase in rent for tenants of over $1,500.”

The median asking rent in a number of provincial areas also rose in September, Jeffries added.

“In Manawatu/Whanganui it was up 16% on a year ago to $290, adding over $2,000 to a tenant’s annual bill.

“Marlborough and the Bay of Plenty also saw solid double-digit growth on this time last year, signalling that tenants could be looking to shift to areas with lower living costs,” he said.