Wellington Rents The First In NZ To Pass $600

Wellington’s rental market kicked off 2021 with a bang, the region’s median weekly rent hit a record-breaking $615 per week in January, according to the latest Trade Me Rental Price Index.

Trade Me Property Sales Director Gavin Lloyd said Wellington was the first region in the country to ever reach $600, passing Auckland which hit an all-time high of $590 in January.

“Wellington’s rental market was hot all through 2020 and it’s continued this form into the New Year with a huge spike in rents. Supply has long been a problem for the capital - the number of properties in the region can’t cope with the demand.”

Mr Lloyd said the outlook wasn’t great for Wellington tenants looking for a new flat either.

“January and February are typically very hectic months for the Wellington rental market. Lots of tenancies come up for renewal at this time of year and students start looking for a flat for the University year which creates very high demand.

“The other factor at play is that house prices in the Wellington region have been hitting records too. The average asking price for a Wellington property has climbed considerably in the last year, this keeps first home buyers in their rental property longer, while they save for a house deposit.”

Taking a closer look at the region, Porirua maintained its title as the most expensive district to rent in the country with the median rent at an “eye-watering” all-time high of $680 per week. Wellington City came in close behind with a record-breaking $640 per week while Lower Hutt was $590.

“Not only are tenants having to dig deep into their pockets to rent in the Capital, but they’re also struggling to find a property as the Wellington rental market continues to struggle with supply. In January the number of rentals on the market was down 3 per cent when compared with the year prior.”

The most popular rental property onsite in January was a three-bedroom townhouse in Kelburn which had 132 enquiries in the first two days onsite.

National rent hits new high

“The national median weekly rent increased by 5 per cent in January when compared with the year prior to reach a new record of $540 per week.”

Mr Lloyd said every region in the country saw an annual increase in rent in January with seven of the country’s fifteen regions hitting all-time highs. The largest percentage increases were seen in Manawatu/Whanganui (17%), Marlborough (13%), and Northland (11%) which all saw median weekly rents reach an all-time high.

“Auckland ($590), Bay of Plenty ($550) and Nelson/Tasman ($500) also saw median weekly rents reach all-time highs.

“However, there is a silver lining for tenants, supply does look to be getting better in some parts of the country.”

Mr Lloyd said nationwide the number of rentals on the market rose 4 per cent in January when compared with the year prior while demand was up by 3 per cent. “As property prices continue to grow, we’re seeing more investors buy property across the country and put it up for rent.

“This is an interesting picture, for most of last year demand has continually outstripped supply. However, in January the tables appear to have turned. If supply continues to outweigh demand we would expect prices to cool off as we head into winter which will come as huge relief for tenants after a tough couple of years of rent increases.”

Rents in Auckland climb to new record

Following the national trend, Mr Lloyd said the median weekly rent in Auckland reached an all-time high of $590 last month after climbing 3.5 per cent year-on-year.

“The most expensive district in the region was North Shore City, followed by Rodney, Papakura, Manukau, and Franklin - making Auckland City the cheapest district to rent in Auckland.”

Auckland’s most expensive districts in January (* new record)

“Despite supply in the Auckland region rising 9 per cent year-on-year and demand climbing by 7 per cent, rents continued to rise in Auckland. We reckon this comes down to the rental market catching up after a big few months. Landlords are still looking for top dollar for their investment properties after huge demand. If supply continues to increase, we expect to see prices flatten out though.”

The most popular rental property in Auckland in January was a one-bedroom, one-bathroom unit in Kingsland which had 125 enquiries in the first two days onsite.

Bigger houses popular

“The national median weekly rent for large houses (5+ bedrooms) and medium houses (3-4 bedrooms) reached new records in January.

“Lockdown may have played a part in this. After spending a lot of time stuck at home last year, some tenants probably looked around and decided they needed a bit more space.”

Units the most popular urban property

Mr Lloyd said units were popular in January after the median weekly rent reached an all-time high of $430 per week.

“Apartments in Christchurch saw the strongest rent growth of any urban property type, climbing 11 per cent to $400.”

Mr Lloyd said apartments in Auckland were the only urban property to see rents dip when compared with the year prior.

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