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Queenstown Rents Experience Biggest Drop In Seven Years

Rental prices in the Queenstown-Lakes district saw the biggest annual percentage drop in seven years after falling 28 per cent on June last year, according to the latest Trade Me Rental Price Index.

Trade Me Property spokesperson Aaron Clancy said the median weekly rent in Queenstown-Lakes dropped by a “staggering” $210 in June when compared to the same month in 2019 (when it was $760). “After reaching a record-breaking median weekly rent of $800 in January this year, rents in the Queenstown-Lakes district came crashing down in June to $550.

“This is the largest annual percentage drop we’ve seen in the district since we started recording rental data.

“With our borders closed, towns like Queenstown-Lakes, which rely on tourists and visitors, have been hit hard by COVID-19 and now we’re seeing this impact the rental market. As a result, we’ve seen a lot of landlords drop the price of their rentals dramatically in an attempt to lure tenants.

“This is a far cry from what we were seeing pre-COVID, when demand was through the roof and rental prices were climbing rapidly. For the first time in a long time, Queenstown-Lakes is a tenants market, with falling rental prices coupled with the increase in available properties.”

Mr Clancy said the number of properties available to rent in Queenstown-Lakes rose 152 per cent on June 2019, meaning tenants had plenty more options to choose from.

Rents in a number of neighbouring districts also experienced an annual drop. “In Wanaka, the median weekly rent dropped by 13.5 per cent year-on-year to $550, while Central Otago saw a decrease of 12 per cent to $435.”

Demand for rentals rises nationwide

Mr Clancy said there was a lot of good news in June for landlords too. “While supply is increasing in many places, demand is up across the country as well. Nationwide June saw a solid increase in demand when compared to last year with the number of enquiries on rentals up by 16 per cent.

“The average weekly rent price was up in every region in the country too.

“Demand for rental properties across every region was up in June with Hawke’s Bay (up 34 per cent on last year), Otago (up 35 per cent) and West Coast (up 73 per cent) seeing the most enquiries of any region.

“With a rising number of Kiwis moving home from overseas as a result of this pandemic and far fewer leaving the country for their OE or new jobs, we’re still seeing a very strong rental market in many parts of the country.”

Mr Clancy said when it came to supply, however, there was a disparity between local rental markets. “While supply was up in most regions, Bay of Plenty (-2.9%), Gisborne (-11%), Hawke’s Bay (-12.7%), Marlborough (-14.2%) and Northland (-14.5%) all saw an annual drop in the number of rentals available.”

Regions in the South Island appeared to be seeing the largest year-on-year change in supply in June. “We’ve seen some massive increases in the supply of available rental properties throughout the South Island with the West Coast (75%) Otago (26.6%) and Southland (24%) all up year-on-year.

“We believe there are a few factors at play here – the dip in tourism and resulting job losses, landlords moving short term accommodation onto the long term market, , and people moving regions to find work. Many parts of the South Island rental market are in flux and are going to take some time to find the new normal.”

Nationwide the number of properties available to rent in June was up by 6 per cent when compared with June last year.

Mr Clancy said New Zealand’s median weekly rent continued its pattern of year-on-year growth in June. “The national median weekly rental price was $510 last month, marking a 2 per cent increase on June 2019, when rentals averaged $500 per week.”

Auckland and Wellington rents rise

Both Auckland and Wellington followed the national trend with the median weekly rent in both regions rising 2 per cent in June when compared to the year prior. “The median weekly rent was $570 in the Auckland region and $550 in the Wellington region in June”

“In the Auckland region, the districts with the highest median weekly rents were North Shore City ($620), Rodney ($590) and Auckland City ($550). Overall demand in the region was up 17 per cent and supply was flat.”

The districts in the Wellington region with the highest median weekly rents were Wellington City ($580),Porirua ($580) and Lower Hutt ($520).

“The number of Wellington properties available for rent was up 8 per cent on June 2019, while demand for Wellington rentals was up 15 per cent.”

Small houses see the biggest rental price growth

Mr Clancy said the median weekly rent of small houses (1-2 bedrooms) saw the biggest annual increases in June. “Nationwide, small houses saw a 10 per cent increase in median weekly rent when compared to the same month last year. Comparatively, medium (3-4 bedroom) and large (5+ bedroom) houses saw increases of 1.2 per cent and 3.6 per cent respectively.”

Apartments and unit prices flat on 2019

“Nationwide, the median weekly rent for apartments and units were flat on June 2019 prices last month, while townhouses saw a 1.9 per cent increase.

“Removing Auckland from the equation, median weekly rents for apartments (7.1%), townhouses (6.7%) and units (1.5%) all saw a year-on-year increase.”

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