Most expensive rental region a surprise

Think that rents in the Super City or the Capital are the highest in the country? Well, you’d be wrong. It’s Porirua which is the costliest district to rent in.

That’s according to Trade Me Property’s latest rental price index – which puts Porirua’s median weekly rent at a record $625 in September after climbing 25% year-on-year.

Trade Me Property spokesperson Logan Mudge says Porirua has now over-taken Wellington city as the most expensive area to rent in New Zealand.

“Rents in Porirua have been hot on the tail of Wellington city rents for a while now. Both districts were neck-and-neck at $580 in June, but September was the first time we have seen Porirua come out on top.”

Heightened demand, in conjunction with slowing market supply, was responsible for pushing rental prices in Porirua up.

In September, the number of rentals listed in Porirua was down 6% when compared with the same month last year. At the same time, demand shot up 17% on the year prior.

Mudge says it’s the same story right across the Wellington region but the lure of Porirua is that you can get a bigger place with more space and traditionally you’d be paying less than in Wellington city.

“The tables have certainly turned this year and we’ll be watching closely to see if this trend continues – especially as interest in the district wasn’t restricted to the rental market alone.

“House prices in Porirua are also on the rise. “The average asking price in Porirua jumped 11% year-on-year in September - so it’s not surprising to see rental prices are following suit.”

But it’s not just Porirua rents which are on the rise.

Trade Me’s data has national rents increasing by 3% year-on-year in September, which is the biggest increase since April. The rise has left the national median weekly rent at $510, as compared to $495.

Mudge says they are starting to see the rental market return to its normal rhythm after the nationwide lockdowns changed the market drastically this year.”

September saw the highest spike in demand nationwide this year, but the number of rentals available last month did not keep up with that demand.

“Nationwide, supply was up just 3% on last year, and with demand up by 18% year-on-year this mismatch is responsible for rising rents.”

After Porirua, North Shore city (in Auckland) and Wellington city tied for the second most expensive district to rent in the country with both areas seeing a median weekly rent of $600 in September.

The Auckland region overall saw rents rise up 4% year-on-year, which left the median weekly rent at $570 in September.

Demand for rentals in the provinces was also up, with all but four regions seeing an increase in demand.

The Bay of Plenty (up 32%), Nelson/Tasman (up 26%), Hawke’s Bay (up 25%) and Canterbury (up 23%), all saw demand increase by more than 20% when compared with last year, Mudge says.

“Smaller, but still notable, demand increases were also seen in Manawatu/Whanganui (up 17%), Waikato (up 16%), Taranaki (up 11%), and Marlborough (up 5%).”

Looking at rents across the regions, Manawatu/Whanganui and Taranaki reached new records. Their median weekly rents were up by 16% to $440 and by 13% to $450 respectively.

Meanwhile, the latest Stats NZ rental price index figures show that in September 2020 the stock measure for rental prices was up by 0.2% on August and by 3.3% on September 2019.

In contrast to last month, the flow measure for rental prices also has them increasing - by 1.7% on August and by 0.9% on September 2019.

*The “stock” measure of rents shows rental price changes across the whole rental population, including renters currently in tenancies, while the “flow” measure of rents captures rental price changes only for dwellings that have a new bond lodged against them in the reference period.

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