Head of Trade Me Property Nigel Jeffries said demand for rental properties was strong in October with the average rental receiving 28 per cent more enquiries within the first week of being listed than a year ago. “Properties are getting snapped up fast as demand outstrips supply. A two-bedroom flat listed in Wellington recently received nine enquiries in its first three hours onsite, and this is just the tip of the iceberg.
“While the national median weekly rent has remained unchanged for the 11th consecutive month at $450, this increasing demand and shortage of supply looks set to put pressure on rents. At a national level, supply and demand have remained relatively balanced over the last 12 months as more investment stock has come on the market. Now it appears that the scales are tipping.
“If this trend continues, things are going to be very tough for a huge number of renters, particularly students, who will be hunting flats in summer.”
Wellington tenants bearing the brunt
Mr Jeffries said Wellington was bearing the brunt of the rental shortage with 69 per cent less rental properties on the market than last year. “Wellington appears to be worst hit by this rental pinch, which is worrying news for those flat-hunting in the capital.”
Mr Jeffries said that while the median weekly rent in Wellington was unchanged for the eighth consecutive month at $450, he expected “some large jumps” over the next few months.
January is typically the busiest month for the Wellington rental market as students return for the university year and begin looking for accommodation, he said. “Last January the market was very tight and the 2018 edition looks like it will be even more difficult.”
Available Auckland rentals drop 35 per cent
“The number of available rentals in the Super City dropped 35 per cent on last October and we are beginning to see the effect on prices,” said Mr Jeffries.
The median weekly rent in Auckland increased to $525 in October, up 2.9 per cent on last year. “Rents in Auckland have remained relatively steady for 2 years, holding around the $500-$530 mark, but if this shortage of rental properties continues we can expect to see new record rental prices in the City of Sails.”
Christchurch mirrors national trend
“Christchurch city is mirroring the national trend with 59 per cent less rentals than last October. Unsurprisingly, demand for rentals in the Garden City grew 4 per cent on last year as tenants struggle with a lack of properties to choose from,” Mr Jeffries said.
He said Christchurch was yet to see any effect on prices, with the median rent down 1.3 per cent to $395 per week but it was “only a matter of time”.
Rent rises in the regions
Mr Jeffries said rental prices in the regions were already moving, with the Hawke’s Bay, Nelson and Southland reaching new record rents in October.
“The median weekly rent in the Hawke’s Bay jumped 10.6 per cent to a new high of $365 and will cost tenants an additional $1,820 per year. Nelson also reached a new record median rent, rising 12.3 per cent to $410 per week. The median weekly rent in Southland rose 6 per cent to $265,” he said.
Small houses still the favourite
Mr Jeffries said small houses (1-2 bedrooms) are still the hot favourite for tenants around the country and particularly those in Wellington.
“Smaller homes are typically more manageable for tenants to maintain and with the national median rent at $375 per week, smaller houses are cheaper than the average apartment or townhouse,” he said.
The national median weekly rent for large houses (5+ bedrooms) and medium houses (3-4 bedrooms) remains unchanged on last month at $750 and $500 respectively.