Rents stay at all-time-high of $580 a week despite house price slump

Rents in New Zealand stayed at an all-time high in November despite house prices dropping, the latest Trade Me data shows. 

The data showed the national median weekly rent was $580 for the second month in a row in November. 

Trade Me Property sales director Gavin Lloyd said weekly rents are up four percent compared with the same month in 2021 and "leaves it matching the all-time high first recorded in April this year". 

"However, if we take a closer look at the numbers, there was a lot of variety around the country, with most of the regions seeing rents boom while Auckland and Wellington saw no year-on-year growth," Lloyd said. 

The Nelson/Tasman and Taranaki regions saw the biggest jumps with both regions' median weekly rent increasing by 14 percent, he said. This resulted in a new record high in the Nelson/Tasman region of $570 a week. 

Manawatū/Whanganui was not far behind with the region's median weekly rent jumping 13 percent to a new all-time high of $540.

Lloyd said Marlborough (-7 percent), Wellington (-3 percent), and Auckland (0 percent) were the only regions to not see rent increase in November. 

"Auckland, Wellington, and Bay of Plenty were all tied as the most expensive regions to rent, with all three seeing a median weekly rent of $600."

But Lloyd said while the increases have been tough for renters, it is slowing down compared with last year. 

"Last year we saw the national median weekly rent jump by $45 in twelve months, whereas this year it has only increased by $10 since January." 

Supply skyrockets in the lower North Island

That slower price growth is partly due to the booming supply of rental properties with the number of listings jumping six percent year-on-year in November. It's the eighth month in a row of supply increases year on year. 

The biggest increases were in the lower North Island, with rental listings up 38 percent year-on-year in Manawatū/Whanganui and 39 percent in Wellington.

While supply grew, nationwide demand fell in November down 5 percent year-on-year. 

"Nelson/Tasman (-29 percent) and Wellington (-19 percent) saw the biggest drops in demand when compared with the same month in 2021," he said. 

And as a result Lloyd said rents are likely to hold or cool in the coming months. 

The Otago region was the only outlier in November, seeing an 8 percent year-on-year drop in supply and a 13 percent jump in enquiries.

Auckland rents fall back to $600

The Auckland region's median weekly rent was back at $600 in November, after climbing to $610 in October - putting it in line with prices last year in the same month. 

The most expensive districts in the region were North Shore City ($650), Rodney ($640) and Papakura ($630). In the Auckland City district, the median weekly rent was $585 last month, down 1 percent year-on-year.

The most popular rental listing in the Auckland region in November was a four-bedroom home on Sunnynook Road in Forrest Hill. Lloyd said the property had a weekly rent of $650 and received 206 enquiries in its first seven days onsite.

Wellington rents fall by 3 percent 

In Wellington, the median weekly rent was $600, down 3 percent year-on-year, and just $50 below the record high last recorded in February. 

Porirua and Upper Hutt were tied as the most expensive districts in the region last month, both at $650 while in Wellington City the median weekly rent was $620.

Last month's most popular listing in the Wellington region was a two-bedroom apartment on Thorndon Quay in Thorndon. The $400-a-week property received 324 enquiries in its first seven days onsite.

Large properties rents see the biggest growth

The national median weekly rent for a large property (5+ bedrooms) was $950 last month, up 6 percent when compared with November 2021.

Nationwide, medium-sized (3-4 bedrooms) properties saw rents jump 2 percent to $650, while small properties (1-2 bedrooms) had a median weekly rent of $495.

Compared with the other main centres, rents in Christchurch City saw standout growth in November. The median weekly rent for the district jumped 9 percent year-on-year to $510, while medium-sized properties in the district saw rents jump to a record-breaking $595.

The rental price growth comes as house prices drop steadily after their peak late last year. The latest QV House Price Index showed prices have dropped more than $100,000 since the start of the year. House values fell further from January to November than they have in more than 15 years.

The QV data shows houses dropped in value by 2.9 percent nationally over the three months to the end of November – a slight improvement on the 3.9 percent quarterly reduction reported at the end of October. 

The average value is now sitting at $945,568. But with one month to go until the start of 2023, that figure is now 10.2 percent lower, or $107,747 less in real dollar terms, than at the start of 2022.