Rents unchanged for third month in a row

Media Release
21 October 2016

Rents unchanged for third month in a row

Tenants can breathe easier as the national median asking rent remained unchanged at $440 a week for a third consecutive month in September, according to the latest Trade Me Property Rental Index.

Head of Trade Me Property Nigel Jeffries said rents had remained static for a sustained period across the country. “Last month, median asking rents stubbornly refused to rise across New Zealand, including in the major regions. Tenants will be pleased with the extended breather, but landlords might be starting to scratch their heads.”

The median asking rent has been stuck in a rut since April, with the only exception in June when it dipped to $430 per week. Over the past 12 months the weekly advertised rent has only risen by $20 a week, up 4.8 per cent.

Mr Jeffries said median asking rent in Auckland was “firmly locked” at $500 a week, and up only 0.2 per cent on a year ago.

“The Auckland market has levelled out at $500 a week for a typical rental property, and remains unchanged for the previous couple of months. In fact, it was way back in November last year that the market first reached $500 a week. Despite individual months rising to $520, it has settled down to an increase that equates to a $1 per week rise over the past 12 months.”

Wellington market on the move
Mr Jeffries said the rental market in the capital was heavily influenced by the university year, where students looking to find accommodation significantly increases demand.

“Each year tertiary students hunting for a flat brings median asking rents to a peak around January, before edging down slowly through until winter. Prices flatten off before the cycle repeats again heading into summer,” he said.

Despite this pattern, the incremental year-on-year increase was significantly greater than previous years. In September, the median asking rent was $410 per week – a small fall of $10 a week on last month, but the underlying year-on-year growth was up 7.9 per cent. This equated to an annual increase in rent for tenants of over $1,500.

Wellington feels the pinch
Wellington is feeling the effects of increased demand for rental properties of all sizes, resulting in a higher median asking rent for tenants in the city.

“Of the major metro areas, tenants in the capital city will be feeling the pinch more than others with an 8 per cent lift in median asking rent compared to this time last year. Meanwhile in Christchurch, advertised rent hasn’t changed for the past five months at $400 a week, down 7 per cent on last year and putting the power solidly in the hands of tenants,” Mr Jeffries said.

Table 1: Median weekly rent by property size & region: September 2016 vs September 2015

Units in demand
Units are becoming more expensive to rent, with a national median asking rent of $350 per week, up 6.1 per cent or an additional $1,000 a year.

Units in Auckland hit a new high in September, up $10 a week from August to $420 a week. In Wellington, tenants of units are expected to fork out an additional $30 a week when compared to last year.

Table 2: Median weekly rent by property type & region: September 2016 vs September 2015

-ends-

NOTES

· About the Trade Me Property Rental Price Index: This report provides a comprehensive monthly insight into the rental market covering price trends by type and size of property across New Zealand. The index is produced from Trade Me Property data of properties that have been rented in the month by property managers and private landlords. On average over 11,000 properties are rented each month and the report provides a comprehensive insight into this part of the property market for tenants, landlords and investors. The index is calculated using the median rent in the month, this being an accurate statistical assessment of the current rent being charged by landlords and property managers.

· More info: For information about the differences between the Trade Me Property data and bond data collected by Tenancy Services, please read this post by Dr Lucy Telfar-Barnard from the University of Otago: http://onetwothreehome.org.nz/2015/05/11/how-high-is-the-rent/

· Regional data: If you are after information for a particular region, please email Jeff Hunkin via mediaenquiries@trademe.co.nz and we will see what we can unearth for you. We can also provide the graphs and tables.

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