Capital rental market booming

Wellington

The latest Trade Me Property Rental Index is out and it shows that rents were up nationwide in December, with the national median weekly rent climbing to a record $450.

Head of Trade Me Property Nigel Jeffries said that the rental market started 2016 relatively sedately, but then accelerated significantly in the last few months of the year.

Median weekly rents around the country grew pretty sharply from October, he said.

“Typically December is reasonably quiet as everyone winds down into the Christmas period, but this December we saw rents jump 7.1% on a year ago.

“That’s the largest monthly change we’ve observed all year.”

Further jumps are likely in January when landlords reassess the financial equation for their investment property and when a number of tenancies come up for renewal, he said.

Most markets around the country saw strong year-on-year growth in their median weekly rents at years end.

But Jeffries picked Wellington as one of the strongest rental markets in the country, with a 9.8% year-on-year increase.

December saw strong growth for the Capital’s median weekly rent as it equalled the national median of $450.

This is as compared to November’s median weekly rent of $433.

Jeffries said that Wellington’s rental market started the year very quietly but took off in the second half of 2016.

There was unlikely to be any letting-up of the rental pace in January as it’s the traditional peak for the city’s rental market, he said.

“Wellington properties are attracting far more interest than other cities with more people watch lists per property in Wellington than Auckland and Canterbury.”

Some regional rental markets also turned in strong, double-digit year-on-year growth in their median weekly rents. 

They were Marlborough (up 23%), Hawke’s Bay (up 16.8%), Waikato (up 11.4%), and the Bay of Plenty (up 10.8%).

However, Auckland’s rental market slowed slightly in December, after several months of rent rises.

The month saw the Super City’s median weekly rent fall by $10 to $510 from $520 in November.

Despite this, Auckland rents were up by 3% year-on-year and it was likely that rent figures will bounce back, Jeffries said.

“Auckland has been very strong in the last few months and January is a very busy time in the Super City, so we wouldn’t be surprised to see the median weekly rent hit another record early in 2017.”

There is less hope of rent rises for Christchurch landlords as the city’s rental market remains a tenants’ market.

After a year and a half of rental stagnation, there was a small rise in the median weekly rent in December.

It was up to $399 from $395 to $399 - but this figure remains well below the market’s March 2015 peak of $495.

Jeffries said that, even with the rise, the city’s median weekly rents are still down 5% year-on-year.

“Unlike in Auckland and Wellington, Christchurch tenants are in the box seat. Rents are barely moving and there are plenty of options in the market.”