News

Rents show no growth for the first time in three years

The national median weekly rent remained flat year-on-year for the first time since July 2017

25 August 2020

The national median weekly rent remained flat year-on-year for the first time since 2017 in July, according to the latest Trade Me Rental Price Index.

Trade Me Property spokesperson Aaron Clancy said the July national median weekly rent saw no change when compared with the same month last year, sitting at $500. “New Zealand rent prices have grown consistently in recent years, the last time we saw the median weekly rent remaining flat year-on-year was August 2017.

Mr Clancy said rental price increases first began to slow from March. “In 2019, the average monthly year-on-year growth was 5.5 per cent. By comparison, so far in 2020 the average monthly year-on-year growth has been under 4 per cent. In May and June, year-on-year growth was just 2 per cent.”

Mr Clancy said the closing of the gap between demand and supply was behind the deceleration of rental price increases. “Interestingly, while rentals continue to be in hot demand, with the number of enquiries up by 9 per cent last month when compared with July 2019, this actually marked a drop on demand seen in previous months.”

“Meanwhile, the number of properties available to rent in July 2020 saw only a slight drop of 1 per cent when compared to the same month last year, so the market was a lot more balanced in July than it in earlier months of this year.

“Crucially these numbers were ahead of the latest changes in our alert levels so it will be interesting to see how both landlords and tenants have reacted to the August changes.”

However, Mr Clancy said fluctuations in rental prices varied between regions, with some seeing more change than others. “In the Auckland region, the median weekly rent was flat year-on-year, at $560. Marlborough and Canterbury both saw similar, incremental increases of around 1 per cent.”

“In other regions, rental prices continued the upward trend seen in recent years, with Southland, Bay of Plenty, Nelson/Tasman, Otago, Manawatu/ Whanganui, and Hawkes Bay seeing notable increases of over 5 per cent year-on-year.

“The two regions to drop were the West Coast (down 6.3%) and Gisborne (down 15.5%), both of these regions have small rental markets and can be subject to reasonably large swings at times. We’ll be keeping an eye on both over the coming months.”

Auckland and Wellington rents

When compared to July last year, the median weekly rent in the Auckland region remained flat year-on-year at $560 last month, while Wellington's median weekly rent saw a 4 per cent year-on-year increase to $550.

“In the Auckland region, the districts with the highest median weekly rents were Waiheke Island ($670), North Shore City ($610), and Manukau City and Rodney third equal ($570).”

“Overall demand in the region was up 10 per cent year-on-year, while supply was flat.”

“The most popular rental of the month was a two-bedroom spot on Cambridge Terrace, Papatoetoe that received 104 enquiries in its first 48 hours onsite.”

Auckland’s most popular rental listings in July 2020
Rental addressSuburbEnquiries in first 2 daysBedrooms
Cambridge TerraceCambridge TerracePapatoetoePapatoetoe10410422
De Havilland DriveDe Havilland DriveGoodwood HeightsGoodwood Heights808033
Sunnyfield CrescentSunnyfield CrescentGlenfieldGlenfield777733
“In the Wellington region, the districts with the highest median weekly rents were Porirua ($590), Wellington City ($565) and Lower Hutt ($550).”

“The number of Wellington properties available for rent was down 2 per cent on July 2019, while demand for Wellington rentals was up 1.5 per cent.

“Wellington has seen huge demand in recent months but it looks like, for now, things are settling a little in the capital. Supply across the region continues to be an issue though and if demand shoots up rental prices could follow.”

House types

Mr Clancy said large house rents had shown the biggest decreases in July. “Last month’s weekly median rent for large houses (5+ bedrooms) in the Auckland region was flat on July 2019, while in Wellington and Christchurch, the median weekly rents dropped by 2 per cent and 7 per cent respectively.”

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

“The median weekly rent of units reached a new high of $415, up 5 per cent when compared with July 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.