Rents freeze in New Zealand’s two biggest cities

Rents in New Zealand’s two biggest cities, Auckland and Wellington, have frozen for a fourth consecutive month at $550 and $480 per week respectively, according to the latest Trade Me Rental Price Index.

Trade Me Head of Property Nigel Jeffries said this was unusual for the winter rental market which typically sees some rent reductions when temperatures drop. “The rental market usually takes a bit of a breather during the colder months, particularly in the cities where we’ll often see a small drop in rents while the majority of tenants and landlords hunker down until spring and summer.

“With the Auckland and Wellington regions bucking the seasonal trend, there’s a good chance we could be heading for more record rents this summer when demand can be expected to skyrocket. Auckland’s sitting at an all-time high - once summer demand kicks in we could see rents jump pretty quickly,” he said.

Mr Jeffries said it wasn’t just Auckland and Wellington bucking the trend either. “We’re seeing huge demand throughout the country particularly in Hawke’s Bay, Otago, the Bay of Plenty and Waikato.”

On a national level, the median rent was up 5.6 per cent on July last year to $475 per week.

Auckland rents halt
Mr Jeffries said while rent in Auckland remained at its peak and unchanged since April, there was some good news for tenants in the central city. “We’ve seen a 17 per cent bump in the number of rental listings in central Auckland compared to last year which means there are more options out there for prospective tenants.”

“Rentals in Manukau City were in hot demand in July with a 24 per cent increase in enquiries in their first two days onsite compared to this time last year. The most popular rental in Auckland was a two-bedroom house in Flat Bush which received 49 enquiries in the first two days,” he said.

Auckland City and North Shore, on the other hand, saw a reduction in enquiries, falling 6 per cent and 13 per cent respectively.

Auckland’s most popular rental listings in July 2018

Wellington rents on ice
“Rents in the Wellington region remained at a record $480 per week for a fourth consecutive month and we’re continuing to see more tenants move out of the central city,” Mr Jeffries said.

“Wellington tenants were more interested in rentals in Lower Hutt than any other district in July, with the number of enquiries in their first two days onsite sky-rocketing 52 per cent on last year. In Upper Hutt, the number of enquiries was also up a solid 31 per cent, while enquiries in Wellington City fell 8 per cent.”

Mr Jeffries said the median weekly rent in Lower Hutt was up 1.1 per cent on last year to $450, Upper Hutt was up 7.2 per cent to $410 per week, and Wellington City rents climbed 6.1 per cent to $520.

“With significantly lower rents, the Hutt Valley is becoming more attractive to renters who are happy to opt for a slightly longer commute to work to save some money. Typically you get more bang for your buck a bit further out too with larger houses available.

“Wellington’s most popular property in July was an apartment in Petone which had 70 enquiries in its first two days onsite,” Mr Jeffries added.

Wellington’s most popular rental listings in July 2018

Rents in Otago reach new record
Mr Jeffries said the median rent in Otago shot up 8.4 per cent on last July to reach a new record of $420 per week as students line up to secure a flat for the 2019 university year.

“In Dunedin, rents were up almost 10 per cent on last year to $400 per week with 15 per cent more views on rental listings in the first two days onsite than last year. Looking at the popular student suburb of North Wellington, the average number of views in the first two days climbed a whopping 29 per cent compared to July last year,” he said.

Mr Jeffries said tenants in the region aren’t out of the woods. “Typically, we see rents in Otago peak in August so we’re not expecting to see the situation ease just yet. After the busy winter period, rents usually ease back after the university flat scramble settles.”

Around the regions
Thirteen of New Zealand’s 15 regions saw rental increases compared to this time last year with Manawatu/Whanganui remaining unchanged and the West Coast (down 9.6 per cent) and Canterbury (down 1.3 per cent) the only regions to slip back. The regions with the biggest increases were Hawke’s Bay (up 11.1 per cent), Otago (up 8.4 per cent) and Southland (up 8 per cent).

“Tenants in the Hawke’s Bay will be feeling the rental squeeze this month with an 11 per cent jump in median weekly rent on last year to $400 per week.”

Mr Jeffries said that rental properties in the Waikato were in hot demand and reached a new high in the middle of winter, climbing 5.1 per cent on last year to $410. “The most popular Waikato rental on Trade Me in July was a three-bedroom house in Hamilton which received a 24 enquiries in the first five hours of being listed and 83 enquiries in its first two days onsite.”

Small houses prove popular
Mr Jeffries said the median weekly rent for a small house (1-2 bedrooms) in Auckland jumped 5 per cent on last year to reach another record in July at $470. Small houses across New Zealand were also proving popular with tenants and reached a new high of $395 per week, following a 6.8 per cent annual increase.

Table 4: Median weekly rent by property size & region: July 2018 vs July 2017

Units hit a new high in Auckland
Mr Jeffries said the median weekly rent for units in the Super City fetched a new high in July, climbing 5.3 per cent to $450 per week.

“Apartments for rent across the country increased by $10 a week on June to match January’s record at $470 per week. These types of properties continue to be the hot favourite for tenants across the country as they are typically warmer, drier and easier to maintain.”

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