Wellington landlords are now seeing New Zealand’s highest rents after the city’s median weekly rent rose by 5.8% year-on-year to an all-time high of $565 in December, according to the Trade Me Rental Price Index.
The number of rental properties also fell by 7% year-on-year in December and yet there was a 15% increase in the average number of enquiries.
Head of Trade Me Rentals Aaron Clancy says this supply vs demand equation is pushing rents up really quickly and there isn’t any relief in sight for now.
“We’re already seeing huge demand and interest in rental properties across the first few weeks of 2019.”
With growing demand for rental properties in the Wellington region, and tight supply, there will be more record-breaking rents to come, he says.
“As house prices in the capital continue to rise, more Kiwis are having to stay in their rentals longer to save for a deposit and this is driving demand.”
The wider Wellington region was in slightly more affordable shape but the region’s median weekly rent did go up by 8.3% year-on-year to hit a new record of $520 in December.
“Tenants planning to move out of the city to the likes of Lower Hutt or Porirua for better rents are likely to find it easier than central Wellington,” Clancy says. “But demand is still very high right around the region.”
But although Wellington rents soared in December, both the national median weekly rent and Auckland’s median weekly rent remained unchanged.
The national median weekly rent remained stable at $480 for the fifth month in a row. That is still up by 4.3% on December 2017.
Auckland city’s median weekly rent also remained stable on $550 a week for the ninth month in a row.
Clancy says the huge number of tenancies up for renewal early in 2019 and the annual influx of students into the city mean they expect to see big jumps in Auckland rents in the coming months.
“Also, while rents in Auckland city were unchanged on the year prior at $550 per week, the median weekly rent for the Auckland region was up 3.8% year-on-year to match the city at $550.”
Meanwhile, many regional markets saw an increase in median weekly rents, with several reaching new records, in December.
Those that hit record rents were Bay of Plenty (up 9.1% to $480), Manawatu/Whanganui (up 16.7% to $350), Marlborough (up 6.5 % to $450) and Southland (up 10.3% to $295).
The only region which didn’t see an increase in December was Nelson/Tasman which was down by 2.4% on December 2017.
Clancy adds they are expecting to see the median weekly rent for apartments, townhouses and units to increase further as with rents rising as they are often a cheaper alternative to a typical Kiwi flat.
