Wellington Rents Stall For The First Time In Five Years

The median weekly rent in Wellington came to a grinding halt in August, showing no annual increase for the first time since October 2015, according to the latest Trade Me Rental Price Index.

Trade Me Property spokesperson Aaron Clancy said Wellington’s median weekly rent remained flat when compared with August 2019, at $550 per week. “The Wellington region has experienced huge rental growth in the last few years and this is the first time we have seen Wellington rents stall since they first took off in late 2015.”

Mr Clancy said this was particularly surprising considering demand in the region increased by 20 per cent in August when compared to 2019.

“The pause can’t be put down to the government's move to freeze rental prices, as this rule only applies to existing tenancy agreements.”

Mr Clancy said it is likely that an increase in smaller properties entering the rental market has caused prices in Wellington to halt. “In August we saw a 13 per cent increase in the number of small (1-2 bedroom) properties listed for rent in the Wellington region.”

However, Mr Clancy said rents may not stay stagnant for long. “In the coming months if demand remains high landlords will be looking to get the most for their investment. Also, landlords who need to get their rentals up to spec to meet the new Healthy Homes regulations standards will undoubtedly pass those costs on.”

Mr Clancy said slowing rental prices would come as welcome news to many tenants in the region. “Renters in Wellington have been faced with exponential price increases in recent years and have become accustomed to record-breaking rents, with the rental market almost unrecognisable when compared with just five years ago.”

Mr Clancy said Wellington was not the only region that saw rents halt in August. “We also saw rents remain flat on August 2019 in Taranaki and Otago last month.”

National rents show increase again after pausing in July

The national median weekly rent increased by 2 per cent year-on-year to $510 in August. Mr Clancy said this increase comes after rents showed no growth for the first time in three years in July.

Nationwide demand in August was up by 8 per cent when compared with the same month last year. “Most regions showed an increase in demand, with the exception of Marlborough and Southland, which both saw a drop in demand, while in Auckland, demand was flat on August last year.”

Supply, however, was down by 3 per cent nationally on August 2019. “Northland and Marlborough saw the largest drops in supply, down 35 per cent and 14 per cent respectively.”

Auckland rents grow by 4%

The median weekly rent in the Auckland region was up 4 per cent when compared with August last year, at $570. “Looking at Auckland city, rental prices showed no change when compared with August 2019, with median weekly rent remaining at $550 last month.”

The most expensive districts in the region were North Shore City ($600), Rodney ($590), and Manukau City ($580).

“A three-bedroom house in Waitakere for $490 per week was the most popular rental onsite last month, receiving more than 90 enquiries in its first two days onsite.”

Wellington city rents show minimal growth

While the median weekly rent in the Wellington region remained flat on August last year, in Wellington city rents increased 1 per cent year-on-year. “The average median weekly rent for Wellington city was $575, making it the most expensive district in the region.”

“Porirua and Lower Hutt came in second place equal as the next most expensive spots, both with a median weekly rent of $550.“

Bay of Plenty rents hit new record high

Mr Clancy said looking across the country, rental prices were either flat or up on August 2019 in all fifteen regions last month. “The Bay of Plenty had a stand out month, with a 9 per cent increase in the median weekly rent, hitting an all-time high of $525.”

In Otago, supply was up by 27 per cent when compared with August last year. “This follows the general annual trend of peaks and troughs we see in the region, driven by the large student population’s rental market activity.”

House sizes and types

Mr Clancy said small houses (1-2 bedrooms) to rent showed the smallest year-on-year change in August. “Last month’s median weekly rent for small houses was flat on August 2019 in Auckland and nationwide, and dropped by 1 per cent in Christchurch.”

“The only region to show an increase in rent for small houses was Wellington with a 4 per cent increase.”

“The median weekly rent for units in Auckland reached a new high of $475, up 6 per cent when compared with August 2019.”

© Scoop Media