High demand makes for rent rises

New Zealand’s national median weekly hit $495 in March after climbing 5.3% on last year, according to the latest Trade Me Rental Price Index.

Further, the data reveals that every region in the country experienced a year-on-year increase in rent for the first time in five months.

Trade Me’s Head of Rentals Aaron Clancy says there’s high demand for rentals nationwide with a significant 28% increase in the number of enquiries in March, as compared to March 2018.

“Demand for rentals is very high right across the country and, in most places supply is not keeping up.

“From what we’re seeing renters are staying in their rentals longer while they get deposits together and in certain parts of the country home-ownership is moving beyond the means of many Kiwis.”

Unless the supply of rental properties can be increased, we’re only going to see rent prices climb in the future, he says.

Of the main centres, Wellington City is the most expensive city to rent in at $580 per week, but its closely followed by Auckland City with rents of $570 per week.

In the Wellington region, median weekly rent eased to $525 in March, as compared to its January peak of $550. But that’s still up 8.2% from March 2018 when the median rent was $485 per week.

The Auckland region’s median weekly rent remained at a record $560 for a second consecutive month in March, which is an increase of 3.7% on last year.

In Christchurch, there has been a surge in demand for rentals and the median weekly rent has gone up by 1.2% year-on-year to $405 in March.

Clancy says that since the rebuild there have been a lot of rental properties on the Christchurch market and supply was easily meeting demand.

“We’re now seeing a jump in demand which could see prices jump in the coming months. The number of properties listed for rent was down 18% on the year prior while enquiries jumped by 48%.”

Around the rest of New Zealand, Gisborne, Hawke’s Bay and Manawatu/Whanganui saw the largest annual jumps in rent across the country. Those regions saw their average weekly rents increase by 17.7%, 10%, and 9.4% respectively.

Several regions also turned in record average weekly rents in March. They were Nelson/Tasman ($450), Southland ($300) and Hawke’s Bay ($440).

The national median weekly rent for apartments also hit a record high of $490 in March. That was a 4.3% year-on-year increase.

Clancy says that with rising rental prices across the country, many Kiwis are opting for urban properties such as apartments, townhouses and units which is driving prices up.

However, now that the Government has opted not to introduce a capital gains tax a market uncertainty has been removed and that should make for more stability, he adds.