Despite a decrease in home prices, November saw New Zealand rents remain at record highs, as reported by Trade Me.
In November, the statistics indicated that the median weekly rent throughout the country was $580.
A 4% increase compared to the same month in 2021 “leaves it matching the all-time high initially recorded in April this year,” said Gavin Lloyd, sales director at Trade Me Property.
But if we look at the figures more closely, there was a lot of variation throughout the nation, with most areas seeing rents increase, but Auckland and Wellington are experiencing no year-on-year gain, as Lloyd put it.
A rise of 14% was seen in the median weekly rent in the Nelson/Tasman and Taranaki areas. Due to this, the average weekly wage in the Nelson/Tasman area jumped to a new high of $570.
Meanwhile, in Manawatu/Whanganui, the median weekly rent increased by 13 percent to a record-breaking $540.
Lloyd said that only Marlborough (-7 percent), Wellington (-3 percent), and Auckland (zero percent) did not see rent increases in November.
The median weekly rent in Auckland, Wellington, and the Bay of Plenty was $600, making them all the most expensive places to live in New Zealand.
Lloyd said that while the hikes have been challenging for tenants, they are beginning to slow down compared to the previous year.
Since January last year, the national median weekly rent jumped by $45; this year, it has only grown by $10.
The decrease in the North Island’s supply has led to a dramatic increase in price.
Rental homes are in high demand. Therefore the number of postings increased by six percent year over year in November, contributing to slower price increases. The supply has risen from the previous year for the seventh month.
Manawatu/Whanganui and Wellington, in the lower North Island, had the most significant increases, with rental listings up 38% and 39%, respectively, year-over-year.
Lloyd said that while the hikes have been challenging for tenants, they are beginning to slow down compared to the previous year.
Since January last year, the national median weekly rent jumped by $45; this year, it has only grown by $10.
The decrease in the North Island’s supply has led to a dramatic increase in price.
Rental homes are in high demand. Therefore the number of postings increased by six percent year over year in November, contributing to slower price increases. The supply has risen from the previous year for the seventh month.
Rental listings increased by 38% in Manawatu/Whanganui and 39% in Wellington year over year, both in the lower North Island.
In November, demand throughout the country declined 5 percent yearly, even as supply increased.
In comparison to the same month in 2021, “Nelson/Tasman (-29 percent) and Wellington (-19 percent) witnessed the largest declines in demand,” he stated.
Lloyd predicted that rents would remain stable or decrease over the next several months.
Only in Otago did supply fall by 8% year-over-year and demand rise by 13% in November.
Rates in Auckland have dropped back down to the $600 mark.
After increasing to $610 in October, the median weekly rent in the Auckland area dropped to $600 in November, matching the median rent from the same time the previous year.
North Shore City ($650), Rodney ($640), and Papakura ($630) were the most expensive areas in the region. There was a yearly decrease of 1 percent in the median weekly rent in the Auckland City area, with the figure at $585 the previous month.
The four-bedroom property on Sunnynook Road in Forrest Hill was the most sought-after rental in the Auckland area in November. After just seven days on the market, Lloyd reported 206 inquiries and a weekly rent of $650.
Rents in Wellington are decreasing by 3%.
The typical weekly rent in Wellington was $600, down 3% year over year and just $50 lower than the all-time high set in February.
This past month, the median weekly rent in Wellington City was $620, while in Porirua and Upper Hutt, it was $650.
A two-bedroom flat on Thorndon Quay in Thorndon was last month’s most viewed Wellington offer. After just seven days on the market, the $400/week house had 324 inquiries.
The most significant rent increase is for commercial buildings.
The typical weekly rent for a big home (5+ bedrooms) in the United States was $950 in December, up 6% from the median cost in November 2020.
The typical weekly rent for a medium-sized (3-4 bedroom) home increased by 2 percent to $650 throughout the country, while the rent for a small (1-2 bedroom) home was $495.
Christchurch City’s rent increases were much higher than the other major cities in November. Rents for medium-sized houses in the area reached a record high of $595 per month, while the district-wide median weekly rent increased by 9 percent to $510.
This increase in rental costs is co-occurring as home values continue to decline from their late 2017 highs. Prices have fallen by almost $100,000 since the beginning of the year, as measured by the most recent QV House Price Index. The drop in home prices from January to November was the steepest in over 15 years.
Using QV data, we can see that home prices fell by 2.9% from the beginning of the year to the end of November, which is better than the 3.9% quarterly decline seen at the end of October.
The current average price is $945,568. However, with just one month left before the start of 2023, that amount is now 10.2 percent smaller, or $107,747 less in real dollars, than it was at the beginning of 2022.
