NZ’s rental growth hotspots

Trade Me Property’s latest rental data is out and it shows Auckland rents are stagnating with year-on-year growth of just 0.3%.

Head of Trade Me Property Nigel Jeffries said Auckland’s median weekly rent had fallen from a record high of $520 in May.

“Auckland’s median weekly rent was $500 again this month, and we’ve seen rents hover around this figure most of this year.”

Further, the city’s average asking price went up by $88,000 in the last year, but median weekly rents went up by just $1 in the same period.

Jeffries said that 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.”

Even Auckland’s apartment market has seen an easing in median weekly rents. In August they were down on July, by $10, to $460 per week.

In comparison, Trade Me Property’s data shows many regional markets are experiencing very healthy year-on-year rental growth.

Jeffries said that, of the 12 regions to see rental growth compared to last year, Auckland was at the bottom of the list.

“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.”

1. Bay of Plenty (up 20%)
2. Gisborne (up 19.6%)
3. Manawatu / Wanganui (up 17.0%)
4. Northland (up 11.5%)
5. Southland (up 11.1%)

Jeffries said the Bay of Plenty’s market was the most challenging for tenants, given the huge 20% jump in median weekly rents over 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, which is the same median weekly rent as we see in Wellington.”

Meanwhile, only Canterbury (down 4.8%), West Coast (down 12.5%) and Taranaki (down 0.7%) reported year-on-year decreases in median weekly rent.

Comments from our readers

On 21 September 2016 at 5:20 pm jpaynter said:

This observation (Auckland rent slowdown) does not align with what I have observed nor be in accord with my rents that have all gone up this year. I wonder if they are comparing the same types of properties. e.g. number of bedrooms, type of dwelling, suburb and so on. It is a bit pointless comparing one month with the rest and the slow ($1) rise. If apartments for instance represented more of the properties rented in 2016 than they did for 2015, then prices may have come down, if the comparison was against standalone dwellings. Waikato rents have also gone up but the above figures do not include that region; it may represent the fringe of the Auckland market for people who can no longer afford to live there.

NZ’s rental growth hotspots

Landlords with a focus on cash flow might want to look out of Auckland and towards one of the five regional markets experiencing stellar rental growth.

Tuesday, September 20th 2016, 12:00PM 1 Comment

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