Auckland rental prices 'flat' for the year despite demand rising

Laptop and house keys
Trade Me July Property data shows the median weekly rent in Auckland (and nationwide) hasn't changed in a year. Photo credit: Getty.

Auckland rent prices haven't risen in a year, offering some respite for Kiwis strapped for cash due to the COVID-19 pandemic.

Trade Me Property listing data for July shows the median weekly rent for Auckland properties was $560 - the same as in July 2019.  Low interest rates, the 6-month rent freeze and closed borders could be among the reasons why rents hadn't gone up.

Trade Me Property spokesperson Aaron Clancy said demand in the Auckland region was up 10 percent year-on-year, but supply - and rent prices - were flat.

"Compared to July last year, the median weekly rent in the Auckland region remained flat year-on-year at $560, he said.

“The districts with the highest median weekly rents were Waiheke Island ($670), North Shore City ($610), and Manukau City and Rodney third equal ($570),” he added.

The nationwide median weekly rent of $500 was also the same as a year ago.

“New Zealand rent prices have grown consistently in recent years, the last time we saw the median weekly rent remaining flat year-on-year was August 2017," Clancy said.

Last month's most popular Auckland rental was a 2-bedroom house in Cambridge Terrace, Papatoetoe. Listed at $490 per week, it received 104 Trade Me enquiries in the first two days.

Ray White head of property management Zac Snelling, said over the last month, demand for homes to rent in Auckland was "relatively static".

"[We received] around 3000 tenant applications in July, a minor 1 percent drop in total applications received versus July last year" Snelling said.

"The most in-demand properties currently are 2-3 bedroom dwellings in the more reasonable price range (for Auckland) of approximately $500 to $650 per week," he added.

The agency had seen a rise in the number of group applications, a sign that people were cutting back on living expenses due to the COVID-19 pandemic.

"Those who historically would have preferred to live alone or manage rent payments independently are banding together into professional or family groups to help open up a border range of possible rental options," he said.

COVID-19 alert level 2, which comes into effect for Auckland (and remains in-place for the rest of New Zealand), at midnight on Sunday, will make viewing properties easier.

But gathering limits, hygiene practices and contact tracing may slow the process.

"If you’re in the market for a rental, don’t let the current alert levels put you off as there's plenty of stock available and viewings are still occurring...just allow yourself more time to search and secure a new home," Snelling added.

Trade Me said rent prices showed signs of slowing from March. This year, average monthly year-on-year growth was under 4 percent - below the monthly average of 5.5 percent in 2019.

In July, the median weekly rent in Wellington was slightly below Auckland's at $550 - a 4 percent increase year-on-year. 

The data didn't capture the second wave of COVID-19, which had alert levels 3 and 2 reinstated on August 12. The end of the Government's 6-month rent freeze from September 25 and easing of COVID-19 alert level restrictions were likely to affect demand (and supply) for rental properties.

“Crucially these numbers were ahead of the latest changes in our alert levels so it will be interesting to see how both landlords and tenants have reacted to the August changes," Clancy said.