by Miriam Bell
The new year has kicked off with a sharp jump in rents around the country.
Trade Me Property’s Rental Index shows that the national median weekly rent went up from $420 to $435 a week in January.
This increase follows a period of flat rental growth nationwide in the second part of 2015.
Head of Trade Me Property Nigel Jeffries said the jump was a correction in the market
“We weren’t surprised to see a rent correction in January – it’s a trend we see each year as many landlords look to adjust their rental incomes at the start of the year.
“Looking back, last January we saw rents rise by $20 per week, then remain pretty flat for the rest of 2015.”
While there was a correction in national rent, some regions increased more than others.
Wellington saw the biggest jump in January with the median weekly rent going up by $40 to hit a new high of $450 a week.
Despite this rise, Wellington landlords shouldn’t expect more to come.
“Over the last five years we’ve seen Wellington rents spike each January, decline slowly throughout the year before another spike the following January,” Jeffries said.
However, it is Bay of Plenty landlords who have the most to be pleased with.
The region’s median weekly rent went up by $25, in January, to reach a new record of $395 a week.
Further, the Bay of Plenty has led the country in rent rises over the last year. Rents in the region have gone up by 16.2% since this time last year.
Jeffries said growth in the Bay of Plenty is extraordinary.
In Auckland, there was an increase of just $5 in the median weekly rent, which left it at $500 a week.
This increase means that Auckland’s median weekly rent has increased just 4.2% in the last 12 months, which pales in comparison to the rise in house values over the same period.
Jeffries said that Auckland rents have been hovering around the $500 a week mark for some time and don’t look like changing drastically in the coming months.
“This plateau indicates a good supply of rental properties in Auckland and landlords aren’t going to get any extra assistance on their mortgages for the foreseeable future.”
Christchurch was the only major city to see no rental growth.
Weekly rents remained at $420 a week for the fourth consecutive month, which means they are down 6.7% over the past year.
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