Rents hit record high and still climbing
Rents shot up at the end of 2016 to hit record highs, and with January and February usually the hottest in the rental market, they are expected to climb even higher.
Figures from the Trade Me Rental Index showed the median weekly rent jumped to a record $450 nationally at the end of last year.
Trade Me Property head Nigel Jeffries said price rises accelerated significantly in the last months of 2016, and he expected to see further jumps in January, when many tenancies came up for renewal and landlords reassessed prices.
‘‘Typically December is reasonably quiet as everyone winds down into the Christmas period, but this December we saw rents jump 7.1 per cent on a year ago – the largest monthly change we’ve observed all year,’’ he said.
‘‘With the median weekly rent now at $450, Kiwi tenants are paying just over $23,000 a year for their rental property.’’
The capital led the charge, with the second half of 2016 seeing weekly rents up by 9.8 per cent.
Wellingtonians would also likely feel the brunt of the January rent hikes.
‘‘We don’t think January looks like it will be any easier on tenants either as it’s the traditional peak for the capital’s rental market. Wellington properties are attracting far more interest than other cities with more people watchlists per property in Wellington than Auckland and Canterbury,’’ Jeffries said.
Auckland bucked the trend, with median prices falling 10 per cent in December, but Jeffries said prices would likely bounce back.
‘‘January is a very busy time in the Super City – we wouldn’t be surprised to see the median weekly rent hit another record early in 2017,’’ he said.
With more than half of the country’s apartment stock and more new builds coming to market the price of apartments in the city have also remained largely unchanged.
‘‘Auckland apartments hit [an average of] $462 in December, but they’re lagging behind the rest of the market and well down on the on the peak of $490 they hit in April 2016,’’ Jeffries said.
Christchurch remained a tenants’ market, with stagnant prices over the last year and a half. Rents rose modestly in December, but remained well below the peak rents seen in 2015, with median weekly rents at $399 compared to $495.
Only Gisborne, the West Coast of the South Island, and Canterbury had rent prices drop on average in December compared to the previous year, falling 12, eight and two per cent respectively.
Other areas that had large average increases on the previous year included Marlborough, which rose 23 per cent, Hawke’s Bay, which rose 16 per cent, and the Waikato and the Bay of Plenty, which both rose by 11 per cent.