Auckland's supply of rental properties has dropped 35 per cent while the median weekly rent is predicted to spike to an all-time high.
The number of rental properties coming on and off the Auckland market is down 35 per cent compared to December 2016 and rental prices in the region are up 3.9 per cent, according to the latest Trade Me Property Rental Index.
Trade Me head of property Nigel Jeffries said he expected to see the median weekly rent in Auckland to hit a new record in January.
"I wouldn't be surprised to see rents break $550 by the end of summer," Jeffries said. "Typically we see the median weekly rent in Auckland take a slight dip between November and December, however, this year rent remained steady and unchanged on November at $530 per week."
The median weekly rent in Wellington jumped 6.7 per cent in December, hitting a new record of $480 per week.
Demand for rental properties in Wellington was "massive", Jeffries said, with the number of available properties dropping by 70 per cent.
"The capital is bearing the brunt of the rental shortage and January is likely to be even more extreme," he said.
"Since October, the median weekly rent in Wellington has increased $30, from $450 to $480 in December to match the record set in January 2017.
"We expect to see a new record price in January as the influx of university students heats the market even further."
A two-bedroom rental property in Wellington, listed for just 25 hours, received 55 applications, a prime example of the extent of demand.
Nationwide, the number of vacant rental properties has halved since December 2016 with the median weekly rent up 2.2 per cent and recorded as $460 per week.
"While it is common for us to see the median rent increase in December, it doesn't usually increase this much. The market is much tighter than usual and it is highly likely that tenants will be asked for record rents in January and February all over the country."