New Zealand rents continue to stagnate but they could be set to rise under the new government, according to Trade Me Property.
The real estate website’s latest rental index shows the national weekly rent remained unchanged at $450 in September for the tenth month in a row.
It was up by just 2.3% on September 2016 and it is the first time in over seven years that the national weekly rent has stagnated for such a long period of time.
Head of Trade Me Property Nigel Jeffries said the country could be looking at a full year of flat rent at this point.
“Typically the rental market is pretty quiet this time of year as landlords and tenants have been bunkered down for the winter, but it’s unusual to have seen the national rent figure stagnant for so long.”
However, he said rent increases could be around the corner – with post-election uncertainty ending and summer on the way.
“We expect to see some large increases early in the New Year as a large number of leases come up for renewal and the university year kicks into gear and boosts rental prices.
“Many landlords choose the summer months to review their investment and rents jump as a result.”
Further, Jeffries said that the new Labour-led government could have an impact on the rental market.
“Prior to the election, Labour indicated they had some big plans for the rental market including limiting rent rises to once a year.
“It remains to be seen whether that promise survives coalition talks but the threat of these changes could cause jitters for landlords and result in some rent increases for tenants.”
Looking around the country, rents remained steady at best in the main centres but a number of “halo” markets saw good growth.
Auckland’s median weekly rent fell by $10 to $520 in September - although it was still up 4% on last year.
At the same time, rental prices in Wellington stayed steady at $450 per week and were up 9.8% year-on-year.
Jeffries said outside the main metropolitan areas, it was a mixed bag with some landlords seeing double-digit growth and others experiencing little to no change.
But landlords in both the Bay of Plenty and Northland should be happy: rents in the Bay of Plenty went up by $25 in September to $450, while Northland rents jumped by $20 to $395.
“These halo regions have seen rent demand change drastically in the last few years as the Auckland property market has gone crazy,” he said.
“The Bay of Plenty is once again level with Wellington as our second most expensive region, while Northland is just behind the record of $399 per week set back in July.”
The news was not as good for South Island regions.
The median weekly rent in the West Coast and Marlborough dropped 6% to $235 and $320 respectively, while Canterbury’s median weekly rent fell 2.5% year-on-year to $390 per week.