Rising demand for rental properties across the country is making it tough for tenants and stock is struggling to keep up, according to the latest Trade Me Rental Price Index.
Head of Trade Me Rentals Aaron Clancy says they’d seen a 20 per cent increase in the number of enquiries on rentals nationwide in June while the national median rent remained at its all-time high of $500 per week for a third consecutive month.
“We’re seeing an increasing interest for rentals but stock simply isn’t keeping up with the number of properties available for rent in June down seven per cent on last year.”
“With rising house prices, some Kiwis are staying in the rental market longer than before to save for a house deposit. Also, with growing rents some tenants are staying put rather than look for a new rental in this tighter market.
"Unfortunately for anyone looking for a rental property, this is a perfect storm and as a result we’re seeing record rents, increased competition for properties and less stock.”
The regions which are experiencing the largest increases in demand are Bay of Plenty with the number of enquiries up a “staggering” 47 per cent on last year.
Enquiries in Southland had also jumped 45 per cent along with Manawatu/ Whanganui which rose 33 per cent and Canterbury up 32 per cent.
Aaron says they often see a lag between an increase in demand and rising rents which means it’s likely that landlords will lift rents if the demand continues to outstrip supply.
“With such high demand, rents have increased in many regions across New Zealand. In June, five regions saw strong double-digit growth and four reached new record rents. If demand continues like this we expect to see a lot more record rents over the coming months.”
Aaron says Southland saw the biggest annual rent increase, rising 15.4 per cent to a record $300 per week. Otago (up 13.9 per cent to $450), Nelson/Tasman (up 11.4 per cent to $440) and Waikato (up 10 per cent to $440) also reached record median weekly rents in June.
Demand for houses soars 62 per cent
“When we look at demand by property type, houses have seen a huge increase in the number of enquiries, rising 62 per cent on last year.
Aaron says the median weekly rent across all house sizes increased year-on-year and rents for large houses (5+ bedrooms) saw the largest jump of 10.7 per cent year-on-year to $830.
“Rents for large houses (5+ bedrooms) in Wellington rose significantly in June, up 25.8 per cent on last year to $950 per week.
Apartments in hot demand
Aaron says the median weekly rent increased across all urban property types compared to June 2018 but apartments were the hot favourite.
“Demand for apartments, townhouses and units increased in June. Units saw the largest jump with the number of enquiries nationwide increasing 19 per cent in June. Apartments saw the number of enquiries jump 14 per cent while townhouses saw a 6 per cent bump in enquiries.
“The largest rent increase for urban properties was apartments in Wellington which rose almost 10 per cent to $515 in June."