The average national rental price increases, but new listings are down

Nationally, the average rental price increases, but falls in the Auckland region.

Rental market research from realestate.co.nz for June 2018 shows that the national average rental price has increased from $454 to $499 per week (an 5.0% increase) from June 2017. Since data collecting commenced in January 2015, this price is the second highest national average recorded, following a peak reached in May 2018 ($505). 

The area’s which witnessed the most significant rental increases compared to June 2017 were the Coromandel (122%)*, followed by Central Otago (18.1%), West Coast (15.3%) and Wellington (15.0%). 

 Average rental prices in the Auckland region have increased by 8.5% from June 2017 ($569 per week) to June 2018 ($597 per week). 

“This is the region's first drop under the $600 per week mark since February this year and the largest month to month decrease we have seen since July 2015, which may be a signal that climbing rental prices are stabilising.”

“Interestingly, the Auckland region’s decrease in rental price between May and June is identical to what we saw in residential property asking price; a 2.4% decrease”, says Vanessa. 

Region’s which saw a sizeable percentage increase in rental price compared to June 2017 were Central Otago (559 to 660, an 18.1% increase), West Coast (240 to 272, a 15.3% increase), and Wellington (456 to 524, a 15.0% increase)”

“What we tend to see is that in the areas where house prices have increased, rental prices will follow suit,” she says.

Property asking prices increased in Central Otago/ Lakes District (8.2%), West Coast (10.1%) and Wellington (1.0%) between June 2017 and June 2018 respectively. 

“The increase in both house and rental prices are almost always linked to a typical ‘supply and demand’ scenario. Over the past 12 months, new rental listings in all three of these regions have noticeably decreased, which is driving the price increases and demand,” says Vanessa. 

June 2018 saw new rental listings in Central Otago/Lakes District region for the month drop from 96 new properties to 89 (7.3% decrease), 174 to 147 (15.5% decrease) in the Wellington region, and from 38 to 27 homes (28.9% decrease) in the West Coast region over the past 12 months. 

“It is important to note, however, that in May this year, new rental listings in Wellington reached the highest (242) since January 2017. What we can infer from this is that landlords were eager to bring their properties on the market before winter is upon us in full force”, Taylor concluded. 

Metropolitan and tourist regions lead the pack. 

The highest rental prices for the month of June were recorded in the Coromandel* ($749 per week),  Central Otago/Lakes District ($660 per week), followed by Auckland ($598 per week), and Wellington regions ($524 per week). 

“This is what we would expect to see as the winter months approach,” says Taylor.

She continued: “Skiing mecca regions (like Central Otago) generally peak around May and June; key metropolitan areas will remain broadly stable, and the summer hotspot regions will experience a slight lull.”

Another notable trend in June was the widening of the gap in weekly rental price between the Central Otago/Lakes District ($660) and Auckland ($598) regions.

“Over the winter months in 2017, there was no more than 10 to 15 dollars between the average rental prices of the two regions.” 

“Now what we are seeing is a significant breakaway from the Central Otago/Lakes District region, with the most considerable gap recorded since 2016, over $60 above the Auckland rental average.

 

“The rental prices in tourist hotspot, Queenstown, are driving the price increase for the whole region. We continue to see a shortage in available properties in the town and a high prevalence of Airbnb, both of which will factor into determining the rental price,” says Vanessa.

 

As Central Otago/Lakes District region hits an all-time rental high of $660 per week, average asking prices to buy a home have also increased to a little over $900,000, a 3.7% increase from May 2018. 

Four other regions also reached all-time highs, namely; Otago ($455), Waikato ($396), Northland ($403) and West Coast ($277).  

New listings down across the nation.  

New rental listings were down nationally, representing an 11.7% drop from June 2017, according to real-time statistics from realestate.co.nz. 

Nationally, there were a total of 5,800 new property listings for the month.

“This is a contrast to May, which saw an increase in new rental listings in 18 of the 19 regions from the previous month, says Vanessa Taylor.

The largest annual drops compared to June 2017 were seen in Nelson & Bays (down 41.2%, 67 listings), West Coast (down 28.95%, 27 listings) and the Waikato region (down 23.3%, 414 listings).

 

*All best attempts have been made to remove short term rental properties from the Coromandel region. However, misclassified listings may cause this data to be inflated.