New report reveals that rising property prices and falling supplies are driving demand
With property prices rising across the country, the number of enquiries on rental listings has increased by 17% nationwide in the last year, according to the latest Trade Me Rental Price Index.
The report also revealed that the national median rent rose by 3.1% on last year to $495 per week.
Aaron Clancy, sales director at Trade Me, said that rising property prices and falling supplies are impacting rental demand.
“As property prices continue to increase across New Zealand, people are renting longer than they have in the past, some parts of the country like Wellington are growing considerably too,” he said. “This is driving demand in the rental market which means more competition and rising rents.”
“It’s classic supply and demand, if the supply of rental properties can’t keep up with the demand then prices invariably start to rise. In many parts of the country demand is easily outstripping supply and we’re seeing rent increases.”
Read more: Demand for rentals skyrockets as house prices increase
Clancy said the New Year would likely bring more record breaking rents across New Zealand.
“Rents are only going to increase as more tenants do the traditional ‘summer shift’ as their tenancies come up for review and university students come to town,” he said.
Broken down, the report highlighted demand increases in Gisborne, Otago, and Bay of Plenty.
“Looking across the regions, the strongest demand increase was in Gisborne where the number of enquiries jumped a staggering 54% on the year prior,” said Clancy. “Otago saw demand for rental properties spike 44% while enquiries on rentals climbed 41% in Bay of Plenty.”
Meanwhile, the report revealed that demand in Palmerston North jumped 50% on last year, while the number of rentals in the area fell by 4% on September of last year.
“With rising demand and falling supply, it’s not surprising that the median rent in Palmerston North hit a new record in September up 18.6% on last year to $415 per week,” said Clancy. “Medium properties (three to four bedrooms) had a strong year-on-year rent increase with the median weekly rent jumping 13% or $50 on last year to $440 per week. Rent for small properties (one to two bedrooms) rose 11% on last year to $300 per week.”
Among the main centres, Wellington stood out after the median rent in the region rose by 10.4% to $530 per week.
“Taking a closer look at the region, rents in Wellington City are edging closer to the $600 mark after the median weekly rent rose 9.4% on last year to $580 in September,” said Clancy. “Rents in Lower Hutt rose 11% on the year prior to $500 per week, Masterton experienced a 10% jump to $385 and rents in Upper Hutt rose 8.4% to $450 per week in September.”
Rental demand in Auckland, however, remained flat year-on-year, with the median weekly rent stagnant at $550 per week.
