The Rent Price Index provides a monthly analysis of the rental property market across the country. This is based on the rent prices being sought in listings from the past month.
August 2016 Auckland rents rise just $1 in the last year
Auckland’s two-speed property market continued in August. While the average asking price of property for sale in the city has jumped $88,000 in the last year, median weekly rents are up just $1 in the same period according to the latest Trade Me Property Rental Index.
Head of Trade Me Property Nigel Jeffries said tenants in Auckland continued to benefit from very stable rent levels. “Auckland’s median weekly rent was $500 again this month, and we’ve seen rents hover around this figure most of this year. While landlords have seen the value of their properties increase markedly, it looks like it’s been a challenge to leverage that via rental increases. That might be tough for landlords with hefty mortgages to contend with, but tenants will be pleased to have some respite.”
Rental market strong outside Auckland
Mr Jeffries said Auckland’s median weekly rent had fallen from a record high of $520 in May and was up less than 20 per cent over the past five years. “Of the 12 regions to see rental growth compared to last year, Auckland was dragging the chain with just 0.3 per cent growth. Our largest city is seeing growth outstripped by the Bay of Plenty and Manawatu, with both regions seeing huge double-digit rental growth in the last year.”
“Excluding Auckland, the rental market across the country is very strong and tenants are forking out a lot more on average. In the past year median weekly rents outside Auckland have risen from $360 to $380 – that’s approximately $1,000 more a year.”
Only Canterbury (down 4.8 per cent), West Coast (-12.5 per cent) and Taranaki (-0.7 per cent) reported decreases in median weekly rent. Mr Jeffries said Wellington, Otago and Southland had all been “particularly quiet” over the last few years but they’ve recently seen jumps in the median weekly rent of approximately 10 per cent compared to last year.
Bay of Plenty and Manawatu continue to be two of the strongest regions for median weekly rent increases over the past year, up 20 per cent and 17 per cent respectively.
Mr Jeffries said the Bay of Plenty is the most challenging market for tenants, with median weekly rents in the region jumping by a ‘huge’ 20 per cent in the past year.
“Tenants in the Bay of Plenty are paying approximately $3,500 more a year for their rental property than they were a year ago. The region’s median weekly rent has hit $420 a week, the same median weekly rent as we see in Wellington.”
Wellington heads north
Mr Jeffries said Wellington had seen “significant growth” across all house sizes. Medium-sized houses comprise the majority of advertised listings in the capital, and median weekly rents rose by $18 per week since last month to land at $488 a week.
Conversely the Christchurch market remained subdued with weekly rents falling across small and medium-sized houses in the past month. From the peak of the market for these types of properties in the Garden City in May 2015 small houses (1-2 bedrooms) have fallen from $380 a week to $330 and medium sized houses also falling by $50 a week from $490 to $440.
Table 1: Median weekly rent by property size & region: August 2016 vs August 2015
Apartment rents easing
Median weekly rents for Auckland apartments have eased, down to $460 per week, down $10 since last month. “Apartment rents in Auckland have bounced around over the past couple of years – throughout 2015 and in early 2016 we saw the median weekly rent click up from $410 to peak at $490 in April, then slip back,” Mr Jeffries said. “This is largely down to supply as a large number of new apartments have hit the market recently, soaking up the demand from tenants.”
Table 2: Median weekly rent by property type & region: August 2016 vs August 2015
About the Trade Me Property Rental Price Index
The Trade Me Property Rental Price Index is the first report to provide a timely and 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 therefore provides the most comprehensive insight into this critical part of the property market for tenants, landlords and investors. The rental price 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 (How High is the Rent?) by Dr Lucy Telfar-Barnard from the University of Otago