by Miriam Bell
New Zealand’s rental market is slowing down with the national median rent staying at $360 for the third month in a row, reveals the latest Trade Me Property rental data.
Even in Auckland, median rents have now stalled. In October, the median rent eased back slightly to $495 per week from $499 in August and September.
In Christchurch, the median rent continues its decline as supply from the city’s rebuild continues to come on to the market.
In October, it was down to $420 per week from its March peak of $495 per week. This means median rents in Christchurch have fallen by 6.7% over the past 12 months.
The median rent was also down in Wellington. It is now sitting at $390, which is a 1.3% fall since October 2014.
Head of Trade Me Property Nigel Jeffries said it is cheaper to rent a house than buy a house across New Zealand, with the disparity most pronounced in Auckland.
The latest rental data shows that paying off an 80% interest-only mortgage rather than the median weekly rent could see you paying up to $2,000 a year more outside Auckland - and even more in Auckland.
Jeffries said a house owner in Auckland could be paying more than $12,000 extra a year on their mortgage, which was food for thought.
“But there’s so much more to weigh up in reality, such as interest rate changes, potential capital gains and all the other personal circumstances and psychological aspects involved in any property purchase.”
However, he said this disparity could be feeding into the strong interest from Auckland buyers looking to invest in other parts of New Zealand, particularly the Bay of Plenty.
“Some are making the decision to rent in the Super City, but purchase a home in another region to rent out.”
While the Auckland median rent is currently steady, another jump could be on the way.
Jeffries said the SuperCity’s median rent has gone up by nearly 8% over the last year and further growth is likely to come.
“I think we might see another significant jump early next year as many houses come on the market in the New Year and landlords re-evaluate the market rent of their property.”
Over the past five years the median rent in Auckland has risen by $105 per week (or $5,460 a year), which is an increase of 27%.
However, this growth pales in comparison to the 5-year trend around the city’s average asking prices which rose by $305,200 or almost 63% over the same period.
Rents have stalled or are down in many parts of the country, but some regions have seen increases.
The Bay of Plenty, Waikato and Manawatu/Wanganui all produced strong results.
The Bay of Plenty saw 8% year-on-year growth in the median rent, which added $1,300 to the annual rent for a typical property.
Northland saw an increase of $10 in the median rent. It is now sitting at $320 per week, which is a new record high for the region.
This compares to the period from 2010 to 2014, when Northland’s median rent remained stuck between $280 per week and $300 per week.
In Manawatu median rents were up by 16% to $260 per week. This is as compared to $225 per week a year ago.
Jeffries said this increase was down to the impact of lower rental stock with listings slipping from 450 to 350 in the past year.
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