The New Zealand rental market kicked back into gear in April as the median weekly asking rent increased by $10, according to the latest Trade Me Property Rental Index.
Head of Trade Me Property Nigel Jeffries says the median weekly rent hit $440 in April.
People are struggling to find a home as rental prices continue to increase.
'Rents around the country are up almost five per cent on last year and renting a typical Kiwi house is now nearly $23,000 per annum.
'It's been very quiet in the rental market for a few months, but things have kicked back into gear. The Auckland juggernaut has come to life and the surrounding regions are seeing the impact of the ‘halo effect' too.”
Nigel says it looks like Auckland landlords are passing on the costs of higher mortgages to tenants as the city turned in its first significant rental increase in some time.
'The median Auckland asking rent has been stagnant for the past 10 months at around $500 a week. But in April rents jumped up $20 a week to $520, up just over seven per cent on last year, and a record high.”
In the Bay, the average rental price has increased from $340 in April 2012 to $440 in April 2016.
The Auckland halo effect
The halo effect has also been in effect in the ‘for rent' market with several regions surrounding Auckland experiencing significant rent increases in the last year.
Nigel says median rent in Northland ($350 per week, up 16.7 per cent on last year), Bay of Plenty ($400 per week, up 12.7 per cent) and Waikato ($360 per week, up 9.6 per cent) were seeing 'huge demand”, akin to the ‘for sale' markets in the regions.
Across the rest of the country, the North Island experienced solid rent increases on last year, except Taranaki and Gisborne.
Outside the ‘halo zone', the star performer was Manawatu/Wanganui which has seen a steady rise over the past six months from $250 per week to a new record high of $280 per week.
A year ago rents were just $230 per week, where they have been hovering for the last five years.
In contrast, the South Island has been very quiet, with Canterbury seeing an 8 per cent year-on-year decline, in line with the trend of the past eight months.
Since the peak of the market in March 2015, the median weekly rent has fallen from $485 to $400 a week, down 18 per cent.
3 comments
Halo Effect
Posted on 21-06-2016 13:51 | By The Hobbit
When looking at the map in this article, could it not be argued that the halo effect is coming out of Canterbury and Southland? Rents must be down in these regions for a reason - perhaps people have left those regions and gone elsewhere, including Tauranga. we should be careful when blaming Auckland for all the wrongs.
Hmmmm
Posted on 21-06-2016 16:48 | By How about this view!
Undoubtedly there will be those wanting to lay the blame at the feet of our political parties for the mismanagement of housing policies. But I am more inclined to suggest that the real estate industry is just as responsible, if not more so. With the proliferation of rental companies, comes the increase in rental costs to pay the increasing management costs and the Mum and Dad rental house owners follow suit to increase the returns on their investment. We shouldn't forget that we are already winding up for the next election and these stories are spun-up in preparation for political gains. No doubt one of the parties will have stories about new migrants having preferential treatment, often the case in other parts of the world. To allay comments; NO! I am not a cheerleader for any political party, I'm just sick of the pathetic political points scoring currently employed
@How about this view
Posted on 22-06-2016 10:16 | By Taffy
Have to agree with you regarding the real estate industry.The political spin doctoring,sometimes I think labour,s Phil twyford is engineering for a coup on the leadership as he,s quoted more than Little even seems more than the PM. Secondly I think the media are as just as bad in particular the likes of Tvnz and Mike Hoskins both his TV and radio programmes we are always getting His opinion Rammed down are throats it,s facts we want.Plus the other local paper is forever pushing the house or rental costs as Headlines just about every week sometimes twice .The bubble will burst!
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