Auckland rents top $400 per week for smallest properties

A property renter in Auckland can now expect to pay $400 per week regardless of property size or type, according to Trade Me Property’s monthly report on median rents across New Zealand. Head of Trade Me Property Nigel Jeffries said that even the smallest unit or 1-bedroom home will cost a typical Auckland renter $400 per week.

“Median asking rents in Auckland have rocketed up more than eight per cent on a year ago. You’re now looking at $499 per week for a typical property, taking annual rent costs close to $26,000 – about $2,000 more than a year ago. It piles more pressure onto the cost of living for tenants,” Mr Jeffries said.

In contrast, Christchurch saw median asking rents continue to decline, down almost five per cent on a year ago to $429 per week, and continuing the negative trend of the previous three months.

“The Christchurch rental market was extremely hot two years ago, with asking rents rising more than 13 per cent year-on-year,” Mr Jeffries said. “In March this year it peaked at a weekly rent of $495 to surpass Auckland, but across the remainder of 2015 we’ve seen rents ease right back and Christchurch tenants are now being asked to pay $3,400 less a year.”

The Trade Me Property Rental Price Index measures trends in median weekly rents for residential properties on Trade Me Property rented out by real estate property managers and private landlords over the past month. Around 11,000 rental properties are let via Trade Me Property each month.

Auckland rents continue to climb

Median asking rents in Auckland reached a new peak of $499 per week in August, the second highest annual increase in the past five years. The highest increase was way back in in September 2011 when median rents went up nine per cent year-on-year.

“Over the past five years weekly rents have risen by 28 per cent in Auckland, adding $5,500 a year to the costs of renting a typical property across the city,” Mr Jeffries said. “The first eight months of this year alone have added a whopping $2,000 a year to the cost of renting – a hefty price to pay for tenants.”

To put Auckland’s median rent changes in perspective, the average asking price for a residential property for sale has soared by almost 63 per cent. And in the first eight months of 2015, the average asking price of a typical Auckland home has increased by almost $80,000.

Christchurch market weakening

Mr Jeffries said the Christchurch rental property market “hit the wall” in March with each month since seeing a decline in asking rent. “It was good news for tenants in the Garden City with median asking rent falling five per cent in August to $429 per week, while Auckland sat at the other end of the see-saw.”

Median asking rents in Christchurch have risen 43 per cent over the past five years, with the yearly cost up $6,700 a year. “Not surprisingly we saw the sharpest rise between 2011 and 2014 where rents rose from $320 to $460 per week over the rebuild period,” Mr Jeffries said. “This took annual asking rents from $16,620 to $23,920 for a typical property in the city.

Ups, downs and plateaus in the regions

Outside Auckland, median asking rent remained relatively stable for the fourth month in a row, up three per cent to $360 per week.

Over the past 5 years, the median asking rent for a property outside of Auckland has increased 20 per cent from $300 per week in August 2010 to $360 per week in August 2015.

Median asking rents increased in ten regions, fell in three regions and were unchanged in two regions.

Five regions saw increases of more than five per cent, with Manawatu/Wanganui up again from a 14 per cent annual increase in July to a 19 per cent annual increase in August. Weekly rents in the region have held steady at $250 per week for four consecutive months.

Weekly rent in Gisborne fell to $280 per week, representing a year-on-year fall of 14 per cent and down from the recent peak of $300 per week in April this year.

Median asking rents in Wellington eased in August to $380 per week, down from a peak in January of $440 per week, unchanged from the same time last year. “The softening of the rental market in the capital mirrors its housing for sale market, which reported a very modest 0.5 per cent rise in the year to August,” Mr Jeffries said.

By house size: Smaller homes in demand

Auckland tenants in smaller homes are forking out an additional $1,716 a year in rent, an eight per cent lift on the previous year to $413 per week. “Asking rent rises are being seen in all homes of four bedrooms or less. It’s most noticeable in one and two bedroom homes, taking the annual rent for a typical small house to nearly $21,500.”

Across the rest of the nation, weekly rent increases were significantly lower, with a rise of 1.8 per cent over the past 12 months for smaller homes outside Auckland (landing at $285 per week), and a 2.6 per cent rise to $390 per week for medium-sized homes.

“In Wellington and Christchurch, the pace of asking rents is flat or tracking in negative territory for all but the largest homes, which offers some comfort for tenants in those areas,” Mr Jeffries said.

Table 1: Median weekly rent by property size & region: Aug 2015 vs Aug 2014

Aucklanders embrace urban living options

“The price of urban living in Auckland keeps getting more expensive with the median asking rents for apartments, townhouses and units all exceeding $400 per week for the first time,” Mr Jeffries said. “All three categories of urban living options are rising at faster rates than almost all house sizes.”

The median asking rent for a townhouse in Auckland rose to $550 per week, reflecting an annual rise of $2,600 per annum. Units also ticked up to $400 per week, or $1,560 more per annum than a year ago.

In Wellington and Christchurch, rises in median asking rent were significantly lower.

Table 2: Median weekly rent by property type & region: Aug 2015 vs Aug 2014

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