National rental prices maintain stability despite changes in government

Prices hold steady for the sixth month in a row

National rental prices maintain stability despite changes in government

National rental prices have held steady for the sixth consecutive month, according to Trade Me’s latest Rental Price Index.

Gavin Lloyd (pictured), Trade Me’s property sales director, said that rental prices have continued to be relatively stable even with the uncertainties that usually arise with changes in government as well as interest rates.

“While we haven’t seen an immediate impact on the rental market, the new government has outlined their 100-day plan with some long-term priorities targeted at upping the supply of rentals,” he said.

In the short term, the biggest impact may be in line with changes to interest deductibility, Lloyd said. With it being brought forward, landlords may be able to claim 60% of their mortgage payments as part of their 2023/2024 financial year expenses.

“This tax boost for landlords could help slow rent increases and encourage investors to keep their rental properties rather than putting them up for sale,” said Lloyd.

The state of rental prices

Compared to November 2022, the national median weekly rent had increased by 6.9%.

Auckland saw a slight decline compared to October as Tāmaki Makaurau (-2.2%), The North Shore (-2.8%), Franklin (-2.3%), and Auckland City (-0.8%) all saw a decrease in rents, which has impacted the region.

“This is not surprising considering we saw Auckland reach an all-time peak last month,” said Lloyd.

Otago also saw a drop to 5.1% where Dunedin had the biggest decrease with a 6.1% decline. Lloyd attributed the drop to the city quieting down due to university students heading away for the summer.

Marlborough saw a 20% increase which was the most substantial year-on-year surge in rental prices all over the nation. Renters in the region now have a median weekly rent of $540, an additional $90 compared to the same time last year.

Houses in Auckland, Wellington, and Christchurch saw a year-on-year increase in terms of value except for larger properties in Wellington. Pōneke’s median weekly rent for a property that has more than five bedrooms now stood at $1,200, which was a 4% decrease.

For Auckland, the value for properties with the same size had a 16.8% rise to $1,150, which was a record high for the city. Christchurch urban properties also peaked at 9.7% with the median rent now being worth $510 weekly.

The demand for rental properties nationwide was down by 1% in November compared to the previous year. However, there was still a gap between supply and demand in some regions, with the most evident one being in Auckland where there was a 16% decrease year-on-year.

“Waiheke Island has seen the most interest in Auckland as demand skyrocketed by 125%, it’s evident that Kiwi are keen on the island lifestyle over the summer months,” said Lloyd.

“However, with a small number of properties available renters will need to act quickly to secure a home.”