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Tight supply means rent rises

A further decline in available rental properties leads Trade Me Property to warn tenants there are “ominous signs” that rent rises are on the horizon.

Monday, October 29th 2018, 10:28AM 1 Comment

by The Landlord

The latest instalment of Trade Me Property’s Rental Price Index shows that the national median rent remained at an all-time high of $480 per week in September.

It is up by 6.7% year-on-year, but Head of Trade Me Property Nigel Jeffries says it feels like the calm before the summer rental storm.

He says winter rent prices remained relatively steady this year, instead of taking the dips we normally see.

“Tenants could be in for some ominous rent rises in the coming months, with tightening supply evidenced by a 6% dip in the number of rentals onsite year-on-year and a number of areas experiencing lifts in demand.”

The data shows median rents in both Wellington and Auckland have remained high at $480 per week and $550 per week respectively.

For Wellingtonians that equates to a 6.7% year-on-year increase for the Capital’s rents which means tenants can expect to pay $30 more a week compared to last year.

While the median weekly rent in Wellington City has seen strong annual growth of 9.3% to $530, it’s the outer areas of Upper Hutt, Porirua and Kapiti Coast which show the largest annual increase.

Upper Hutt had seen the biggest year-on-year growth of 18.6% to $415, followed by Kapiti Coast which was up 15.4% to $450 and Porirua climbed 14.5% to $500.

Jeffries says that after last summer’s hectic rental market in the Capital, they are seeing some signs that this summer might be much the same for Wellington tenants.

“But Wellington’s three most popular rentals in September were all from Lower Hutt - it’s a hot favourite for tenants embracing a longer commute in exchange for cheaper rent.”

In the Auckland region, the median weekly rent remained at a record high of $550 for the sixth month in a row in September. It is up by 5.8% on the same time last year.

Rental demand was greatest in Manukau and Rodney, with both areas reaching record median rents and climbed 10% to $550 and 4.7% to $555 respectively.

Auckland City remained at $550 for a fourth month after rising 4.8% on last year.

Around the rest of the country, some regions have seen strong double-digit year-on-year growth, according to Trade Me Property’s September data.

Median rents in Marlborough were up 20% to $385, in the West Coast they were up 19.1% to $280, in Otago they were up 16.9% to $450, and in Hawke’s Bay they were up 16.9% to $400.

Jeffries says Waikato is experiencing a surge of demand for rental listings, with an 80% increase in the number of enquiries in the first two days onsite.

“A solid increase in demand for rentals in Waikato has pushed the median weekly rent up a solid 7.9% on last year, to $410 in September.”

He says this increase was driven by a 15% drop in the number of listings and an accompanying 100% increase demand for Hamilton rentals.

In Otago the median rent was up by 16.9% on last September to remain at a record $450 per week for a second consecutive month, as rents in the region run hot.

Jeffries says this increase was driven by a strong demand for rentals in Dunedin which saw the city’s median weekly rent up 18.5% on last year to $430 a week.

“This is the largest year-on-year rent increase Dunedin had seen in at least three years.”

Tags: housing market median rents property investment property management

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Comments from our readers

On 30 October 2018 at 9:52 am Peter L said:
The application of the old saying - "There is no such thing as free. If you want gold standard you pay gold".

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 ▼7.65 ▼7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.29 6.59
SBS Bank Special - 7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 ▼7.84 7.35 ▼6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - ▼7.24 6.75 ▼6.39
Median 8.64 7.19 7.27 6.65

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