Rents still at a record high despite house price slump

Rents in New Zealand continued at a record high last month, according to the latest Trade Me data, with the national median weekly rent at $580 for the second consecutive month in November.

This is despite the slump in house prices, with the latest QV House Price Index showing that prices have dived by more than $100,000 since the start of the year and dropped 2.9% in value nationally over the November quarter.

Gavin Lloyd, Trade Me Property sales director, said weekly rents climbed 4% from the same month in 2021 and “leaves it matching the all-time high first recorded in April this year,” Newshub reported.

“However, if we take a closer look at the numbers, there was a lot of variety around the country, with most of the regions seeing rents boom while Auckland and Wellington saw no year-on-year growth,” Lloyd said. 

The biggest jumps were recorded in the Nelson/Tasman and Taranaki regions, where the median weekly rent was up by 14%, resulting in a new all-time high of $570 in the Nelson/Tasman region.

Not far behind was Manawatū/Whanganui, with the region’s median weekly rent climbing 13% to a new record high of $540.

The only regions to not see rent increases in November were Marlborough (-7%), Wellington (-3%), and Auckland (0%), Lloyd said.

“Auckland, Wellington, and Bay of Plenty were all tied as the most expensive regions to rent, with all three seeing a median weekly rent of $600,” he said.

Lloyd said the rises had been tough for renters but were easing compared with last year. 

“Last year we saw the national median weekly rent jump by $45 in 12 months, whereas this year it has only increased by $10 since January,” he said. 

Partly contributing to that slower price growth was the booming supply of rental properties, with the number of listings soaring 6% year-on-year last month. That’s the eighth consecutive month of supply increases YoY.

Lower North Island saw the biggest increases, with rental listings up 38% YoY in Manawatū/Whanganui and 39% in Wellington, Newshub reported.

While supply increased, nationwide demand dropped in November by 5% YoY. 

“Nelson/Tasman (-29%) and Wellington (-19%) saw the biggest drops in demand when compared with the same month in 2021,” Lloyd said. 

This, he said, would likely result in rents holding or cooling in the months ahead.

The only outlier in November was the Otago region, which posted an 8% YoY decline in supply and a 13% rise in enquiries.

Meanwhile, the median weekly rent in the Auckland region went back down to $600 in November, after rising to $610 in October - putting it in line with prices last year in the same month. 

The region’s most expensive districts were North Shore City ($650), Rodney ($640) and Papakura ($630). In the Auckland City district, the median weekly rent last month sat at $585, down 1% YoY.

Wellington saw the median weekly rent fall 3% YoY to $600 in November, just $50 below the record high last posted in February. 

With a median weekly rent of $650, Porirua and Upper Hutt tied as the priciest districts in the region last month, while in Wellington City, the median weekly rent sat at $620.

The TradeMe data also showed that for a large property (five-plus bedrooms), the national median weekly rent was $950 in November, up 6% when compared with same period the prior year. Medium-sized (three-four bedrooms) properties, on the other hand, saw rents lift 2% nationally to $650, while small properties (one-two bedrooms) had a median weekly rent of $495.

Rents in Christchurch saw standout growth compared with the other main centres last month, with the median weekly rent for the district soaring by 9% YoY to $510, while its medium-sized properties saw rents increase to a record-breaking $595, Newshub reported.

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