UPDATE: Weekly rental increases hit city-dwellers rather than the provinces
Trade Me Property head Nigel Jeffries said the latest 6.4 percent rise in the median weekly cost of renting a house in New Zealand is likely to continue for some time yet in the major cities while most provincial regions were still showing little movement.
The Trade Me Rental price index out today shows rents rising faster than property asking prices, which indicates things are tightening up for urban tenants, he said.
The new index measures rental trends for more than 10,000 properties listings through Trade Me Property by private landlords and property managers in October. Jeffries said the rate of increase in rents nationwide had been steep over the past three months but it was mostly occurring in the three main centres with six provincial regions showing a decline.
"You have to look where we have job growth and it is in the metros rather than out in provincial areas. The cities have had more jobs growth leading to more people looking for rentals," he said.
The biggest rise has been in what Jeffries called the "scorching" rental market in Christchurch where median weekly rents have jumped 20 percent year-on-year to a new record high of $510 per week, compared to $425 a year ago. The highest rents nationwide are a median $805 per week for five-bedroom plus houses in Christchurch.
"With 12,000 houses removed from the city and an influx of workers moving in for the rebuild, the rental market remains under pressure in Christchurch," he said.
The increase in median weekly rents was also strong in Wellington, up 9.5 percent on a year ago. Jeffries said the rise was across the board in the capital. He's surprised at a 27 percent jump in rentals for larger homes, now attracting $700 a week, despite a drop in property asking prices as more baby-boomers sell up the family home in preference for smaller apartments.
Auckland remained reasonably stable with a 2 percent year-on-year increase in median weekly rent to $460 per week although the market is dominated by three and four-bedroom houses which saw a 5 percent rise.
On a regional basis Taranaki lead the pack with a 23 percent median weekly increase compared to a year ago to a record high of $370 per week. Jeffries said the region was experiencing a mini boom off the back of the energy sector in New Plymouth with strong increases in property asking prices as well.
Canterbury median rents rose 22 percent while Manawatu/Wanganui defied the national upward trend with a 11 percent fall in median weekly rents, a decline that started earlier this year.
Looking back at the past five years, Jeffries said there had been a 21 per cent increase in rents over that time with the most significant rise occurring in the past two years. Tenants paying a median weekly rent of $360 a week in 2012 were now having to dig out another $40 a week, he said.