Kiwi rental supply surge eases

Media Release: Thursday 14 July 2011

Kiwi rental supply surge eases

National rental supply has eased over the past quarter, and demand has crept up according to an analysis of listings on Trade Me Property.

Brendon Skipper, head of Trade Me Property, said the number of rental properties listed had levelled off. “Supply is still up but only by 2%, so there’s been a shift down from the lofty heights of the 11% surge we saw last quarter.”

He said the ease in supply has been led by a fall in the number of properties listed for rent in several major metropolitan areas including Auckland (-12%), Christchurch (-6%) and Wellington (-2%).

Auckland was once again a standout as a great place to be a landlord. As well as the massive 12% drop in rental listings on the same quarter a year ago, average rent also jumped 9%. Mr Skipper said this showed that increased demand – enquiries were up 7% -was affecting rental prices and property owners were making the most of it.

In the North Shore there was also a drop in listings (-9%), but the impact on rent had been less significant. “Over the bridge the asking price for rent increased by 4%, but this was pretty much in line with what we saw nationally where rent ticked up 3%,” Mr Skipper said.

He said next quarter was likely to see further pressure piled onto the Auckland rental market with the Rugby World Cup soaking up supply, and people “coming out of hibernation” to look for a new place to live in spring.

It was no surprise to see Christchurch listings had taken a dip (-6%), with demand heading up (+9%). As observed last quarter, the average weekly rent being sought by landlords was not exorbitant, up 5%.

Mr Skipper said the citywide picture was a little misleading. “If we drill down into the suburb-by-suburb picture, it’s clear that there are areas where both supply and demand is very low. On the flipside, in less quake-affected parts of the city, demand is extremely high and supply is struggling to keep pace. We expect this will be the case for the foreseeable future.”

Wellington bucked the trend and saw a drop in average rent of 3%, making it the only area in New Zealand where rent declined. “This is a hangover from the city’s massive 17% increase in listings last quarter,” Mr Skipper said. “On the back of that influx, landlords are now finding it trickier to lock in tenants and are lowering rents to entice them. It’s a good time to be a tenant hunting a place to live in the capital.”

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Comparison: Q2 2011 vs. Q2 2010
Area Supply (listings) Average rent Demand (enquiries)
Auckland City - 12% 9% 7%
Manukau City 4% 4% 9%
North Shore City - 9% 4% - 2%
Waitakere City 9% 5% 13%
Christchurch City -6% 5% 7%
Dunedin 8% 2% 5%
Hamilton -0% 4% - 11%
Wellington -2% - 3% 6%
Lower Hutt 10% n/c - 12%
National Total 2% 3% 4%

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