NZ rental prices reach all-time high ahead of summer

And the priciest region is…

NZ rental prices reach all-time high ahead of summer

New Zealand’s national median weekly rent has hit a record high, reaching $625 for December, marking the first increase in almost six months, Trade Me’s latest Rental Price Index has revealed.

Gavin Lloyd (pictured above), Trade Me’s director of property sales, noted that this marks the first instance of a month-on-month increase in December.

“Seeing rent prices go up in the last month of the year is not something we typically do see, especially since the official cash rate stayed the same in late 2023,” Lloyd said.

He pointed out that the $45 weekly increase compared to the previous December reflects the impact of higher living costs faced by Kiwis.

“Many people will be watching the new government in 2024 as recent legislation has reshaped the Reserve Bank’s focus to a singular mandate – to bring down inflation, “Lloyd said.

NZ’s priciest region is now Bay of Plenty

The Bay of Plenty has overtaken Auckland as the priciest region, experiencing an 11.7% increase in rent compared to the previous year, reaching $670 per week. The Western Bay of Plenty saw a surge of 14.2%, while Tauranga witnessed an increase of 7.7%, contributing to the overall rise in rental figures for the region.

Auckland posted a recent dip in rent prices but remained one of the more expensive places to live, often rivalling Wellington.

“Normally, the highest costs are in regions with major cities, but this demonstrates that other areas have plenty to offer renters,” Lloyd said.

Marlborough stood out as the only region with a year-on-year decrease in rental prices, down 0.9%, resulting in a median weekly rent of $530. Southland retained its status as the most affordable place to rent, with a median price of $440 per week.

Rental prices soar across different property sizes

The Trade Me report also highlighted record highs in rental prices across different property sizes. Auckland and Christchurch saw record highs, particularly in smaller properties with fewer than two bedrooms.

In Ōtautahi, median weekly rent for one-two bedroom houses hit $500, along with a similar peak for three-four-bedroom properties, surging by 8.3% to $650 year-on-year. In Tāmaki Makaurau, smaller dwellings also reached their zenith, witnessing a 9.4% rise to $580 per week.

Nationally, properties with five or more bedrooms experienced a significant upswing in December, climbing by 11.7% to $1095, while one-two bedroom properties reached $540, setting a new record high for the country.

Rental demand declines ahead of holiday season

Despite the record highs, demand for rental properties nationwide decreased by 19% in December compared to November, while listings were also down by 17%, the Trade Me report showed.

The trend was evident in various regions, including major hubs. Auckland (20%), Canterbury (19%), and Wellington (8%) all witnessed a decline in demand. In contrast, Gisborne and Marlborough stood out as the only two places experiencing an increase in demand.

“Marlborough experienced a significant surge in demand in December, skyrocketing by 61% compared to the previous year, while Gisborne saw a 42% increase,” Lloyd said. “Given both regions boast ample sunshine hours, it comes as no surprise that Kiwis are eager to soak up the warmth during the sunnier months.

“While there was a notable 21% increase in available listings in Gisborne, the demand still outpaces the supply, making it a bit challenging for renters to secure a place with so many eager to be there.”

Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.