Early start to the summer rent crunch

Rents are breaking records around the country, led by ‘‘massive’’ demand in the capital, but landlords have been warned it can’t last.

Wellington’s usual summer spike in rents has started early, and the cost of a roof over your head is higher than ever in Northland, Waikato and Whanganui.

Trade Me’s latest rental property data shows the median weekly rent in the Wellington region is now $495. In Wellington City, the weekly median is just $10 less than Auckland, at $540.

Auckland’s median was $550 for the seventh month in a row, up 4.8 per cent on last year.

Head of Trade Me Property Nigel Jeffries said the annual rise in demand for Wellington rentals had started early this year.

‘‘Demand in the capital is massive, with 13 Wellington rentals in the country’s top 20 most popular rental listings during October. It’s just the beginning too, summer is around the corner and rents look set to break the $500 mark for the first time.’’

Infometrics economist Gareth Kiernan said there could be some relief for renters in the capital – the property market was slowing generally and that should spread into rentals before too long.

Jeffries said rents in Northland (up 10.5 per cent to $420) and Waikato (up 6.3 per cent to $420) reached new highs in October.

The median weekly rent in Whanganui (up 13.3 per cent $340) was another region to break a record in October while every other region saw a year-on-year increase.

‘‘Supply is struggling to keep up with demand across the country after a 3 per cent drop in the number of rental listings year-on-year.

‘‘With rising house prices, we suspect it’s taking Kiwis longer to save for a deposit and as a result many are having to stay in rentals longer.’’

Jeffries said the number of inquiries received for Auckland rentals in their first two days on the site was up 20 per cent, yearon-year.

‘‘While rents in Auckland have remained relatively flat over most of 2018, we are expecting they’ll heat up in the summer months as tertiary students return and supply continues to battle to meet demand. We predict Auckland rents will get very close to the $600 mark early next year.’’

Mike Butler, of lobby group Stop the War on Tenancies, said the increases would not last forever.

‘‘These increases will continue while demand for rental housing is strong. High demand means that owners can currently pass on extra costs to tenants instead of having to absorb them. The high demand won’t last forever, because new properties are being built and immigration can decline or be reduced.’’