Rents Follow Inflation’s Lead And Grow By 7 Per Cent

The national median weekly rent jumped 7 per cent year-on-year to reach $575 in March, matching the record-high annual inflation growth in Q1 reported by the Reserve Bank last week, according to Trade Me’s latest March Rental Price Index.

Trade Me Property Sales Director Gavin Lloyd said this would be hard news for renters, who are already feeling the impact of inflation seeing an all-time high increase of 6.9 per cent in the quarter ending March 31. “It’s not an easy time to be a renter as Kiwis are having to fork out significantly more for everyday items across the board, including housing costs.”

Mr Lloyd said the Bay of Plenty had a standout month with the median weekly rent growing by 9 per cent year-on-year to reach $600 for the first time on record. “The Manawatū/Whanganui median weekly rent also fell into a new bracket at $500 for the first time marking a whopping 14 per cent year-on-year increase.

“The only other region to see a record in March was Waikato, where the median weekly rent reached $520, up 7 per cent year-on-year.”

Mr Lloyd said the largest growth in median weekly rent was seen in the Taranaki region where It grew by a whopping 18 per cent year-on-year to reach $530 in March.

Looking at month-on-month data, Mr Lloyd said when compared with February, the national median weekly rent saw no change in March. “Tenants will be somewhat relieved to hear that more recently rents have remained stagnant. However, time will tell whether this continues as we head into the cooler months.”

Both supply and demand slow down

Nationwide, rental market supply dropped by 6 per cent last month when compared with March 2021. “The majority of regions saw less rental listings last month than in March last year, with the biggest drops seen in Nelson/Tasman (down 39%), Canterbury (down 33%), and Otago (down 23%).”

Notably, Mr Lloyd said our two main centres flouted this trend, with both Wellington (up 7%) and Auckland (up 2%) seeing a year-on-year increase in supply. “The Manawatū/Whanganui region was the only other spot where supply increased in March, up 8 per cent year-on-year.”

However, Mr Lloyd said the number of rental listings saw a jump when compared with the previous month. “Month-on-month, the number of rentals available onsite increases by 5 per cent last month.”

There were also fewer prospective tenants last month when compared with March 2021, with nationwide demand for rentals falling by 7 per cent year-on-year. “Further, if we look at the month prior, we saw a 3 per cent drop in rental demand in March when compared with February”

Auckland rents remain at all-time high

The Auckland region’s median weekly rent increased by 3 per cent year-on-year to $610 in March, matching the previous record-high first recorded in January. “Looking closer at Auckland City, the median weekly rent in the district was $590, showing a 5 per cent year-on-year increase.”

Mr Lloyd said the most expensive Auckland districts in March were North Shore City, Rodney, and Papakura, which all had a median weekly rent of $650.

Mr Lloyd said demand in the Auckland region was down by 13 per cent year-on-year in March, while supply increased by 2 per cent.

“In March, the most popular rental listing in the Auckland region was a four-bedroom house on Youngs Grove, in Franklin.” Mr Lloyd said the property had a weekly rent of $680 and received 90 enquiries in its first two days onsite.

Porirua continues to be the most expensive district in the country

In the Wellington region, the median weekly rent rose 7 per cent year-on-year to reach $630 in March. “When compared with the month prior, this marked a drop of 5 per cent for the region.”

The highest median weekly rent in the region was seen in Porirua ($670), followed by Wellington City, ($635) and Lower Hutt ($630).

Wellington’s most expensive districts in March 2022 (*-new record)

Mr Lloyd said supply in the region increased by 7 per cent in March, while demand dropped by 14 per cent.

“Last month's most popular listing in the Wellington region was a two-bedroom unit on Hobbs Grove, Epuni. The $495-a-week property received 85 enquiries in its first two days onsite.”

Small property rents reaches $500 for the first time

Mr Lloyd said the median weekly rent for rental properties of all sizes saw an increase last month when compared with March 2021. “Nationwide, the median weekly rent for small properties (1-2 bedrooms) reached a milestone in March, at a new high of $500.”

The largest percentage increase in median weekly rent was seen for medium properties (3-4 bedrooms), which saw an annual increase of 8 per cent nationwide.

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