Rents for apartments, small houses soar as median rent remains at record high

Rents for small houses have reached record-breaking new highs with the median weekly rent for an apartment hitting $540 per week, according to the latest Trade Me Rental Price Index. 

Rental figures for March 2023 show rents for apartments and one to two-bedroom homes are soaring. 

The median weekly rent for apartments is up 8 percent year-on-year while small houses (1-2 bedrooms) jumped 4 percent to $520 a week - both record highs. 

Trade Me Property Sales Director Gavin Lloyd said several factors are driving the popularity of smaller homes including the cost of living crisis and fewer people having children. 

"We're seeing a number of factors play out here. The ongoing cost of living means people are looking for cheaper places, allowing their paycheck to go further," Lloyd said. "Also the way people are living their life is changing - staying single for longer, or choosing to not have children, so they don't need the extra space." 

Demand for apartments and small houses is also soaring - up 55 percent on the previous year, the data shows. 

The median weekly rent across the motu remained at $600 in March - a record high which was first hit in February. 

However, there were several new records set in the regions in March with Christchurch seeing rents soar across all of its urban properties: apartments, townhouses, and units. 

"Ōtautahi has started to see more people move back to the city with the rebuild largely completed. There are more cafes and bars in the city, businesses coming back and inner-city property developments finished - giving Kiwis more reasons to live in the CBD again," Lloyd said.

The city saw a 29 percent jump in demand for urban properties in March when compared with the year prior.

Meanwhile, rents in the Auckland region also jumped to $650 - a $40 per week increase from 2022.

Five more regions also reached record-breaking median weekly rents - Taranaki ($600), Southland ($430), Bay of Plenty ($640), Canterbury ($540) and Hawke's Bay ($625). 

When drilling down to the cities, the median weekly rent in Christchurch city hit an all-time high of $525 - up $35 from the same time a year ago. 

"Tenants are continuing to fork out more for rent, and when we couple that with the increasing cost of grocery bills and other daily expenses - it's a tough time for renters in Aotearoa," Lloyd added. 

Demand continues to outstrip supply 

For the second month running, there has been a nationwide drop in supply - this time with a 13 percent decrease of listings onsite year-on-year.

However, the regions were a mixed bag. The biggest dips in supply were in Auckland (-31 percent), Marlborough (-18 percent) and Southland (-13 percent). 

"These drops were enough to ensure the average across the motu went down, but we did also see some significant jumps in supply," he said. 

"Nine of the 15 regions we monitor saw an increase in the number of rentals on offer when compared with 2022." 

The biggest spikes were in Manawatu/ Whānganui (+44 percent), Nelson/ Tasman (+40 percent) and Northland (+28 percent). 

Demand for rentals continued to rise by 27 percent across the country. Otago saw a 46 percent increase while demand in Auckland was up 44 percent - both streaking ahead as the most popular regions for tenants to be looking for a place to live.