News

Long summer ahead for tenants around the country

Tenants around the country are set for a difficult summer with competition for rental properties surging nationwide.

26 November 2020

2/87 Woodglen Road, Glen Eden, Auckland

Tenants around the country are set for a difficult summer with competition for rental properties surging nationwide according to the latest Trade Me Property Rental Index.

Trade Me Property spokesperson Logan Mudge said October data showed it was the same old story right around the country, with demand outstripping supply and pushing prices up. “There simply aren’t enough rental properties available in almost all parts of the country to meet the needs of tenants. This competition is pushing rents up and keeping them high.

“There’s no real end in sight at the moment either - we’ve seen huge demand consistently for a long time and it could be a pretty tough summer for tenants if this continues. Historically January and February are the highest demand times for rentals so we may see rental records broken through the summer months.”

Mr Mudge said almost every region had seen exceptional demand during October with the Bay of Plenty (30% increase in demand year-on-year), Canterbury (31%), Manawatu/Whanganui (32%) the standouts.

Supply meanwhile was down in a number of regions with Northland (down 29% on last year) and Taranaki (down 12%) seeing notable dips in the number of rental properties advertised.

“The demand being seen around the country was best illustrated by our most popular listing of the month, a four bedroom house in Bell Block New Plymouth which had 101 enquiries in its first two days up onsite.

“For landlords it’s pretty simple - there is huge competition for their properties so they can demand top dollar. With so many people in the market they’re not having trouble filling their investment properties.”

National rents grow by 4% year-on-year

The huge demand around the country has seen the national median weekly rent jump significantly again in October up 4 per cent year-on-year to $520. “The national weekly rent equaled the all time high we first saw in February this year and again in April.

“It’s been over $500 consistently since April 2019 and we wouldn’t be surprised to see it hit the $550 mark in the next six months.”

Auckland rents grow by 1.8%

The median weekly rent in the Auckland region stayed at $570 in October, up 2 per cent year-on-year.

Mr Mudge said while rents look pretty stable in the Super City it’s a mixed bag if you drill down further into the region. “Some of Auckland’s districts are seeing strong price jumps with North Shore leading the pack at $620 (up 4% on last year) followed by Manukau City (up 6%) and Papakura (up 7%) which both are on $580.

“Only Auckland City is down on last year with rents on $550 (down 4%). With the number of rentals up 5 per cent on last year compared to demand jumping 19% it looks likely that Aucklanders will see more rental increases in the coming months.”

Wellington market forges on

Mr Mudge said Wellington continued its strong performance in October. “The median weekly rent in Wellington hit $560 in October, up 2 per cent on last year and $10 more than September.

“Wellington rents continue to surge on with every district in the region up year-on-year. Interestingly Wellington City ($590) has jumped back ahead of Porirua ($575) as the most expensive district in the region after a massive September.

“Porirua is a consistent performer with some of the highest rent prices in the country and we’ll continue to watch so see how it performs in the coming months. Meanwhile, Wellington will see an influx of students in early 2021 and we expect to see prices jump markedly in January and February.”

Prices remain high in the regions

Every New Zealand region except Gisborne and the West Coast saw rent increases year-on-year in October.

“Gisborne and the West Coast are our smallest regions and are susceptible to swings in rent as the market changes. Outside of these regions rents are increasing steadily.

“Taranaki (up 17%) and Southland (up 16%) are the two standouts with rents increasing to $450 and $360 respectively. 

Rents rise for small and medium houses

Mr Mudge said small houses (1-2 bedrooms) hit a record high in October. “Rents on small houses hit $460 per week in October, a new record. Wellington led the charge with 1-2 bedroom properties in the region hitting an average weekly rent of $525.

Median weekly rent by property size & region: October 2020 vs October 2019

Nationally large houses (5+ bedrooms) dipped 2 per cent on last year while medium houses (3-4 bedrooms) rose 6 per cent to $580.

In the regions, Wellington saw price rises across the board with Large Houses commanding a “massive” $1100 a week.

Urban properties prosper

Mr Mudge said urban property options continued to prove popular with rents rising almost across the board.

“Nationally only apartments were unchanged on last year with both townhouses (up 2%) and units (up 8%) seeing increases.

“Wellington’s rental market was again strong with all three urban property options rising and we saw the same in Christchurch.”

Median weekly rent by urban property type & region: October 2020 vs October 2019

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 rounded median rent in the month, this being an accurate statistical assessment of the current rent being charged by landlords and property managers.