Rising rents eyed after tax change
New Zealand rents in March grew by their largest percentage in two and a half years, according to online auction website Trade Me.
But the website said the jury was out on whether the demand was being driven by recent tax changes for property investors.
Median rents across the country rose to $540 per week, up six per cent on the previous year and matching a record high in January. ‘‘This is the first time we’ve seen a year-on-year percentage increase of six per cent since October 2018,’’ Trade Me Property sales director Gavin Lloyd said.
Demand was clearly outpacing supply in many areas, but Lloyd said it was not yet clear whether the Government’s housing policy changes in March were having an effect.
‘‘Some economists are predicting rents will rise as a result of changes to property investment rules, but it’s still too early to see if this is the case, and we may even see rents cool off in the coming months as we enter the quieter winter period.’’
Every region saw weekly rents rise on March last year, with the biggest increase in Hawkes Bay at nearly 14 per cent, a record $535.
Close behind were Taranaki, up 12.5 per cent to $450, and Manawatu/ Whanganui up 10 per cent to $440, the latter seeing demand rise 50 per cent.
Other areas were demand for rentals was high was Nelson/tasman (up 50 per cent), Bay of Plenty (up 49 per cent) and Northland (up 47 per cent). Rents in these areas rose 2.1 per cent, 10 per cent and 8.9 per cent respectively.
Nationally, demand soared 28 per cent last month on year-ago levels, while listings or supply lifted only by 17 per cent.
Lloyd said that was a reversal from the situation in January and February, where supply had been outweighing demand.
In the Wellington market, where houses for sale are scarce, the median weekly rent rose five per cent year-onyear to $590 and by 2 per cent to $600 in the city.
Porirua continued to be most expensive rental market in the country at $650, and at $580 in Lower Hutt.
Demand was up 20 per cent in Wellington region, while supply was up 12 per cent.
However, rents in Auckland were growing comparably slower than other regions, with the median weekly rent up two per cent to $590.
North Shore took the title of most expensive area at $635, followed by Rodney ($625) and Manukau ($600), and rents in the apartment-heavy city centre actually dropped three per cent to $560.
‘‘We haven’t seen the Auckland City median weekly rent increase year-onyear since May 2020 thanks to an increase in supply,’’ Lloyd said.
The only region where demand had not increased was Gisborne. According to other Trade Me data, Gisborne is also the only region where houses are not selling faster than they did a year ago.