Rental Price Index: Auckland weekly rent reaches all-time high despite national median stabilising

Auckland's rental market has reached an all-time high, according to the latest figures from Trade Me's Rental Price Index, with the median weekly rent in the region rising by $5 to $675 when compared with September.

The latest index, which details data for October, found rents in Auckland have risen by $65 when compared to the same time last year.

This is despite the national median weekly rent holding steady for the month of October.

The index found that despite uncertainties surrounding the new Government's formation and how potential new policies could impact the rental market, New Zealand's national median weekly rent has remained stable at $620 since June.

However, Trade Me's property sales director Gavin Lloyd says that could soon change. 

"With National gearing up to lead the country for the next three years, there's potential for more investors to dip their toes back into the property market. If National moves forward with their plans to tweak interest deduction rules and the bright-line test, we might see a boost in investor confidence," Lloyd said on Monday.

"This shift could encourage property owners to offer more rentals, easing the supply pressure tenants are feeling and potentially seeing rent prices ease. However, it's worth noting that these changes aren't going to kick in until April 2024, so we're not expecting an overnight transformation."

Rental Price Index, Jan 2023 - Oct 2023.
Rental Price Index, Jan 2023 - Oct 2023. Photo credit: Trade Me

Meanwhile, regions such as Auckland, Manawatū and Otago broke rental records in October, with Auckland's median weekly rent rising by $5 compared to September.

In Manawatū-Whanganui, renters were shelling out $20 more than the previous month, pushing the median weekly rent to $550. Palmerston North emerged as the priciest area within the region, reaching a new record of $580. 

In the south, Otago set a new high for the third consecutive month, with the median weekly rent for a rental property hitting $590 in October.

"As students flock back to the main centres to secure their new places for 2024, and with the new Government incoming, it looks like we're gearing up for a busy summer in the rental scene," Lloyd added.

"This mix of students searching for homes and policy changes in the pipeline could really shake the rental market up heading into the New Year."

Rents increase for all house sizes

The median weekly rent for houses of all sizes also reached a record high last month, according to the data. 

Smaller homes with one or two bedrooms were up 7.1 percent on the same time last year to $530, while properties with three to four bedrooms reached $695 - an increase of 6.9 percent. Larger homes with five-plus bedrooms jumped to $1080, an increase of 13.7 percent.

This was largely driven by increases in the Auckland rental market, Lloyd said, resulting in annual percentage increases for every size of house.

Rents increase for all house sizes - data chart
Rents increase for all house sizes. Photo credit: Trade Me

Supply still behind demand

The national supply of rental properties dropped by 10 percent in October, according to the data, while demand rose 6 percent year-on-year: figures that indicate renters are still experiencing difficulties with finding a home. 

While demand decreased in most regions compared with the same time last year, Nelson-Tasman saw the biggest annual surge with demand increasing by 33 percent, followed by Auckland on 21 percent and Southland on 5 percent.

Rental Price Index, Oct 2022 vs Oct 2023.
Rental Price Index, Oct 2022 vs Oct 2023. Photo credit: Trade Me

Lloyd put the surge in interest across Nelson-Tasman down to renters wanting a sea-change for the summer months: comparatively, however, Taranaki experienced a significant dip of 27 percent year-on-year.

Lloyd noted there has been an uptick in listings in some smaller regions, saying places like Manawatū, Northland, Taranaki and Southland are looking "pretty promising".

"There are quite a few regional areas that saw a rise in rental listings in October, making them fantastic options for Kiwi to spend their summer months, especially if tenants have the flexibility to move around."