Record rent increases

It is the biggest year-on-year increase of all time, Trade Me’s latest rental price index shows.

The national median weekly rent reached a new high of $550 last month, marking the second record-breaking month in a row.

After remaining stagnant for three months from March-May, rents took off again in June with the median weekly rent reaching $545 and then climbing again in July.

Trade Me property sales director Gavin Lloyd says this marks the largest price growth in the rental market since Trade Me started recording rents in 2015.

“Records were broken in Taranaki ($500) and Auckland ($595) in July. The only region not to see a year-on-year increase last month was Otago, where the median weekly rent dropped by 2% year-on-year.”

When compared with July last year, demand for rentals increased slightly by 1% nationwide.

Canterbury (26%) and Nelson/Tasman (18%) had the largest uplift in demand for rentals in July when compared with the same month last year.

Lloyd says demand is still outweighing supply, with the number of rentals down by 8% nationwide last month when compared with July 2020.

Southland (8%) and Waikato (3%) were the only regions that had an increase in rental supply when compared with the same month last year.

“As long as supply is unable to catch up with demand we don’t expect to see this rate of growth ease off any time soon,” says Lloyd

“What impact the current level four lockdown has on the rental market has yet to be seen.

“Last year after the nationwide lockdown, the rental market heated up quickly.

“Many tenants decided their rental wasn’t up to scratch and there was a flurry of activity in the market as soon as alert levels moved down.”

Lloyd is expecting a similar thing to happen after this lockdown ends, especially as the country enters the warmer months that are typically busier.

Upper Hutt Wellington’s most expensive spot

For the first time, Upper Hutt and Lower Hutt overtook Wellington City to become the most expensive districts in the Wellington region last month.

The median weekly rent in Upper Hutt reached an all-time high of $625 last month, climbing 30% on July last year to overtake Wellington City by $30 a week.

The median weekly rent in Lower Hutt also reached a new high of $600 last month, increasing by 9% year-on-year.

Lloyd says Porirua and Wellington City have traditionally battled it out for the most expensive spot in the region since Porirua took out the top spot for the first time in July last year.

“As we began to see in the Porirua district last year, Wellington tenants are looking outside the city to get more bang for their buck.

“In Upper Hutt they’re likely to get a bigger place with more space for the same amount they’d pay in Wellington City and many are happy to opt for a longer commute in exchange for cheaper rent.”

Lloyd put the rent increases in the Wellington districts down to market supply shortages in conjunction with months of massive demand.

“This is the story right across the Wellington region – it’s a competitive market right now.”

Looking at the wider Wellington region as a whole, rents increased by 7% in July when compared with the same month in the year prior.

Demand for rentals in the Wellington region in July was down by 2% last month when compared with the same month in 2020, while supply was down by 3%.

“After months of pent up demand, there will be a need for consistent slowing in demand to see prices in the region cool off,” says Lloyd.

The most popular rental in the region last month was a two-bedroom house on Meadows Avenue in Lower Hutt, for $490 per week.

“The property received 63 enquiries in its first two days.”

Auckland’s median rent increases

In the Auckland region, the median weekly rent is $595 in July. “This marks the first increase in the region since January.”

In Auckland City the median weekly rent is $570. The most expensive districts in the region are Waiheke ($720), North Shore City ($635) and Papakura ($620).

Lloyd said demand in the Auckland region was down by 5% year-on-year. Supply in the region was also down by 2% when compared with July 2020.

July’s most popular rental listing in Auckland was a two-bedroom apartment on Dene Court Lane, North Shore, with a weekly rent of $450.

“It received 87 enquiries in its first two days on Trade Me.”

Units see the biggest rent increase

When compared with July last year, the national median weekly rent for units increased by 6%, to $440.

“This is the largest increase for rents of all urban properties, closely followed by townhouses which had a 5.5% year-on-year increase.”