The staggered rise of big city rents

The latest instalment of the Trade Me Rental Price Index shows that every region in New Zealand saw an annual increase in rent in July.

Many regions experienced strong double-digit growth in July, with Gisborne (up 16.7%), Manawatu/Whanganui (up 23.3%), Otago (up 11.9%) and the West Coast (up 36.2%) reaching new records.

Trade Me Property’s Aaron Clancy says demand for rental properties continues to rise and there was a 20% jump in the number of enquiries nationwide.

"Supply isn’t keeping up, with the number of rentals dipping 5% nationwide on the year prior.

“With rents remaining high, demand increasing and supply slipping, all the signs are pointing to record breaking rents this summer.”

This meant the national median weekly rent saw a year-on-year increase of 5.3%, which left it at $500 in July.

However, while this is an all-time high, it is now the fourth consecutive month that the national rent has been sitting at $500.

In a similar vein, Wellington rents are up by 10.4% annually, which left them at $530 in July. But this is actually down from June when the region’s median weekly rent was $540 and from December 2018’s record high of $565.

Clancy says that, within the region, Wellington City, Porirua and Lower Hutt had the highest median weekly rents.

“Rents in Wellington City reached $560 in July, rising 7.7% on the year prior. The median weekly rent in Porirua rose 5% to $525 and Lower Hutt saw an 18% jump in rent to reach $530 per week.”

The number of Wellington properties available for rent was down 7% on July 2018 while demand was up 4.5%.

Meanwhile, in Auckland, the median weekly rent was up by 1.8% annually to $560 in July – but it has been sitting at this amount since early this year.

Clancy says there is hot demand for rentals in Auckland with the number of enquiries up 22% on July last year and supply was battling to keep up with available properties dipping by 2% year-on-year.

“While rents in the region have remained unchanged since February, we think this rising demand and falling supply will put pressure on prices, which means we will likely see some big jumps in the coming months.”

Within the region, the highest median weekly rents were in North Shore City (up 3.3% to $620), Auckland City (up 2.7% to $565) and Rodney (up 7.6% to $565).

Clancy adds that the median weekly rent across all house sizes increased on July last year, with the biggest increase being large houses (5+ bedrooms) in Wellington.

“Apartments, townhouses and units are in hot demand and in July we saw a 24% annual increase in the number of enquiries.”