Rents poised to skyrocket this summer
Friday 24 August 2018
Auckland and Wellington rents have frozen over winter but Trade Me Property’s head expects them to surge once summer demand sets in.
By The Landlord
Rents in Auckland and Wellington, remained unchanged at $550 and $480 per week respectively, for a fourth consecutive month in July, the latest Trade Me Rental Price Index shows.
Trade Me Head of Property Nigel Jeffries says this is unusual as the winter rental market typically takes a bit of a breather during the colder months.
This was particularly the case in the cities where they often see a small drop in rents while the majority of tenants and landlords hunker down until spring and summer.
But both Auckland and Wellington rents have been sitting at record highs throughout the winter, he says.
“With the Auckland and Wellington regions bucking the seasonal trend, there’s a good chance we could be heading for more record rents this summer when demand can be expected to skyrocket.”
In Auckland, rental price growth might be balanced out a little by the 17% year-on-year increase in rental listings Trade Me Property has seen, as it means there are more options for prospective tenants.
In Wellington, the significantly lower rents possible in the Hutt Valley mean the area was seeing a surge in popularity, with tenants happy to commute for longer to save money on rent.
But it is not just the rental markets in Auckland and Wellington that have been bucking the seasonal trend.
On a national level, the median rent was up 5.6% on July last year to $475 per week.
This is likely driven by the fact that 13 of New Zealand’s 15 regions saw rental increases compared to this time last year.
Jeffries says they are seeing huge demand throughout the country, but the regions with the biggest increases were Hawke’s Bay (up 11.1%), Otago (up 8.4%) and Southland (up 8%).
“Tenants in the Hawke’s Bay will be feeling the rental squeeze this month with an 11% jump in median weekly rent on last year to $400 per week.
“Rental properties in the Waikato were also in hot demand and reached a new high in the middle of winter, climbing 5.1% on last year to $410.
The rental market situation in Otago is slightly different as the July/August period is when students look to secure a flat for the 2019 university year.
Despite this, Jeffries says the median rent in Otago still shot up 8.4% on last July to reach a new record of $420 per week.
“In Dunedin, rents were up almost 10% on last year to $400 per week with 15 per cent more views on rental listings in the first two days onsite than last year.”
They are not expecting the situation to ease just yet as, typically, rents in Otago peak in August, he adds.
“But after the busy winter period, rents usually ease back after the university flat scramble settles.”
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