High rents the new normal

There’s been a 4.2% year-on-year rise in the national median rent, which left it at $500 per week in November, according to the latest Trade Me Rental Price Index.

Without exception, median weekly rents in regional markets around the country were up, with the Manawatu/Whanganui and Wellington regions turning in double digit increases.

Trade Me Property’s Aaron Clancy says the pace of rent growth across the country suggests the peak summer season is going to deliver some new price records.

It all comes down to supply and demand, he says.

“The number of properties available to rent was fairly flat compared to last year while demand, on the other hand, was up 17%.

“Demand for rentals has increased enormously year-on-year and until there’s a spike in supply high rents will be the new normal.”

Regional rents are continuing to head north at a strong rate, reflecting the ongoing rise in property prices that is keeping people in the rental market for longer, he says.

“If you exclude Auckland from the picture, the nationwide median rent rose 7.1% compared to November 2018 and we’ve been seeing some strong monthly numbers in the regions that often align with property prices rising.

“For example, rents in the Manawatu/Whanganui region and Nelson/Tasman are up by 15.2and 9.8% year-on-year respectively, which is a close reflection of the average asking price results (16.7% and 7%) for the same period.”

Auckland remains the region with the most expensive rents, but the median weekly rent in Wellington is up by a solid 10% year-on-year, or $50 per week, on last year to $550.

Clancy says that means it wouldn’t be surprising to see it take out top spot in the coming months.

“Wellington City itself is now firmly cemented as the most expensive urban centre to rent in, with a median rent of $585 a week, well ahead of Auckland City at $560 and Christchurch City at just $415.”

However, Auckland’s median weekly rent has increased. It was up by 1.8% year-on-year, or $10 per week, to $560 in November 2019.

While most areas in Auckland saw small increases in rents, Waiheke Island broke the mould with a 14.3% jump on last year as median rents hit $600 a week, Clancy says.

“There is still decent demand in the Auckland market. The number of enquiries on rental properties in the region rose 21% on November 2018.”