Rent hikes stall across New Zealand

After years of continuous rent rises, Kiwi tenants can take a breather as the easing in the New Zealand rental market resulted in rents stalling last month.

For the fifth month, the median weekly rent across the country has not moved from $420 per week, according to the Trade Me Property Rental Index.

In Auckland, where properties continue to sell at record prices, the median rent is staying at $495 for the second consecutive month.

Nigel Jeffries, head of Trade Me Property, said median weekly rents in Auckland had risen by almost eight per cent in the last 12 months, from $460 to $495.

"The vast majority of this rise occurred at the start of the year when rents stepped up from $460 to $480 per week in January," he said.

• 7.6pc - rent rise in Auckland (July 2015 vs July 2014)
• 4.3pc - rent rise outside Auckland
• $420 - NZ median weekly rent since April
• $495 - Auckland median weekly rent since June
• 27pc - rise in median weekly rent since July 2010
• $5460 - increase in median annual renting cost since July 2010
(source: Trade Me Property)

"Since then the weekly rent has only seen small incremental increases, a clear indication of lessening demand pressures and a healthier supply of rental properties.

Jeffries said demand had eased from earlier this year, and a majority of the six per cent rent rises over the last year took place at the end of last year and earlier this year.
"We're seeing the rental market slowing down across the country, which I'm sure is welcome news to tenants in the market."

Over the last five years, the median weekly rent in Auckland had risen 27 per cent since July 2010, up from $395 to $495 per week last month.

"For tenants that means they've seen $5460 added to the median annual cost of renting an Auckland property," Jeffries said. "The rental increase is a drop in the bucket compared to the additional $280,000 which has been added to the average asking price of an Auckland property over the same time period."

Median weekly rent outside Auckland - which increased by 20 per cent over the last five years - was unchanged from June, staying at $360 per week.

It rose to $380 per week in March but had since fallen back, which indicated a lack of demand-led inflation, Jeffries said.

Although the overall numbers was showing a "subdued" rental market, it was a "mixed bag" in the regions. Manawatu/Wanganui showed the largest rise, up 13.6 per cent to $250 per week, up from $220 a year ago.

Otago, after reporting falls in annual rents for the past two months, leaped from $300 to $345, representing a 9.5 per cent rise over the past year.

Rents in the Waikato and Bay of Plenty also increased 5.9 per cent and 6.3 per cent respectively, which Jeffries said could be because of "The Auckland Effect".

Compact living options, such as in apartments, townhouses or units saw as strong demand, rising nationally at 8.3 per cent year-on-year.

Auckland apartments command a weekly rent of $450, a peak that remained unchanged over the past four months, representing a 9.8 per cent rise as compared to July last year.

About 11,000 rental properties are let out via Trade Me Property each month and the index measures trends in median weekly rents for properties rented out by real estate property managers and private landlords.