Report also highlights supply changes
New Zealand’s national median weekly rent finally showed signs of slowdown for the first time in eight months, with the latest Trade Me Property (Trade Me) Rental Price Index (Index) showing a $15 drop in September from the previous month.
Last month, the national median weekly rent was only $535, reflecting the impacts of the lockdown in August on the rental market.
“The lockdown brought the country to a halt in August, which, unsurprisingly, sent shockwaves through the rental market, and, as a result, we saw rents stall in our two main centres in September. This will come as welcome news for tenants who have become accustomed to record-breaking rent increases over the last 12 months,” Trade Me Property sales director Gavin Lloyd.
However, Lloyd noted that the national median rent had still increased by 5% on the year prior, the smallest year-on-year percentage increase that Trade Me has seen in six months, and the first time it has seen this growth rate slow down since February.
Read more: National proposes new build-to-rent housing bill
While last month’s data may appear to show rents slowing in response to the recent COVID-19 alert level restrictions, Lloyd said time will tell if this trend will last.
“It’s too early to see the full impact of August’s nationwide lockdown on the rental market, but what we have seen is that market activity didn’t bounce back in September,” he said.
“Nationally, demand was down by 14% year-on-year in September. However, if we look at different regions around the country, it was not the same story across the board,” he continued, noting that Marlborough (up 43%), Canterbury (up 35%), and Manawatu (up 27%) all saw demand for rentals increase last month compared with September last year.
Regarding supply, the number of properties on the rental market plummeted by 20% last month compared to the same month last year, with every region having seen an annual drop in the number of properties listed onsite.
Moving forward, Lloyd expects to see signs of the lockdowns’ impacts on the rental market: “We have seen rents climb consistently since the beginning of last year, unscathed by the various Alert Level changes. The next few months will be really interesting, and we may see this lockdown have a deeper impact on the rental market than any other lockdown.”
