Rents ramp up in Capital’s tight market

The real estate website’s latest Rental Price Index shows that the Wellington region’s median rent hit $550 per week in August.

That’s a rise of 12.25%, or $60 per week, on August last year. It’s also up on last month (July) when the region’s median rent was $530.

However, it is down from the record high of $565 per week seen in the Capital in December 2018.

Trade Me Property’s Aaron Clancy says limited supply in the region is forcing tenants to dig deep into their pockets to pay rent.

The number of rental properties available to rent in Wellington was down by 11% in August, as compared to the same time last year, he says.

“Supply is the biggest issue in Wellington for both rentals and properties for sale. Without more rental properties coming onto the market we’re going to see prices increase further.

“As well as less supply, there are additional costs involved in meeting the new Healthy Homes standards which no doubt will have a run on effect with tenants having to pay higher rents."

The high rents mean they are seeing an increasing number of tenants move out of the central city and into suburbs like Lower Hutt and Upper Hutt in search of cheaper rent, Clancy says.

“Now these once cheaper suburbs are seeing record weekly rents of their own, with the median rent in Upper Hutt up 33% on August 2018 to $485 and the median rent in Lower Hutt up by 14.6% to a new record of $550. 

In contrast, both the national median weekly rent and the Auckland region’s median weekly rent were going nowhere in August.

The national median rent stayed put at $500 per week for the fifth consecutive month in August – although it is up by 4.2% on August last year.

Nationwide, the number of properties available for rent was down by 8% on the year prior while demand was up 9%.

Auckland’s median rent remained unchanged on the year prior at $550 per week in August. It was also down on recent months when it has been sitting at $560 per week.

Clancy says the Auckland property market, including both for sale and for rent, has eased in recent months which will come as welcome news for buyers and tenants.

“Demand, on the other hand, is still on the rise with the number of enquiries on rental properties up 13% on the year prior.”

Within the region there were some rent rises though. North Shore rents rose 3% year-on-year to $610 while Rodney rose 2% to $560.

Around the rest of the country, several other regions saw strong year-on-year increases in their median weekly rent.

They were Otago, which was up 10% to a new record of $495; Southland which was up 14.3% to $320; and Taranaki which was up 10.5% to $420 per week.