Auckland median rent jumps year-on-year as population increases

Auckland renters may be starting to feel the pinch of increasing demand for rental properties, new data suggests.

Trade Me has released its latest rental price index, which reports on the asking rents of properties on the site.

It shows the median rent being asked across the country was $620 in July, the same as June.

But it was $40 more than July 2022. Auckland’s year-on-year increase was $70 a week, to a median $670.

Stats NZ data showed year-on-year prices were up 4.1%.

Supply and demand were down in July, Trade Me said, with 3% fewer listings and 2% fewer inquiries than June.

“Fewer rentals on the market in winter is not entirely surprising, given the cold snap has well and truly hit and people don’t tend to want to move in the winter months,” said Lloyd.

“Even though winter is a traditionally slow time for the rental market, it is even quieter than usual. We expect the market will start picking up again when we hit spring, and it will be interesting to see if landlords respond to the lack of demand with lower rents.”

Kiwibank chief economist Jarrod Kerr said he would expect booming migration to push up rents. There was a net migration gain of 86,800 in the year to June.

It had prompted the Reserve Bank to increase its forecasts for house prices over the coming year.

“They don’t all come here and buy houses, a lot would rent so all else equal that will put pressure on the rental market.”

Wellington rents have been stagnant at $650 a week since March, $10 less than the peak recorded in January.

In Canterbury, rents are up $50 a week, year-on-year.

“This will be hurting the pockets of renters as they face cost of living increases across the board,” Lloyd said.

Westpac chief economist Kelly Eckhold agreed the Auckland rental market in particular was feeling the effect of a population increase.

“A lot of migrants are going to the Auckland area at least to start with.”

He said the data seemed to indicate that rent price growth was settling at a higher level than pre-Covid.

Mike Jones, chief economist at BNZ, said with record population growth and tight supply, he thought the upswing in rental inflation had further to run.

“The big pickup in rental price inflation in Auckland accords with what we’re seeing in terms of tight rental supply and the extra demand from buoyant population growth.

”Auckland isn’t necessarily the tightest market in New Zealand when it comes to available rental supply, but it has seen the largest reduction in supply over the past 12 months. Essentially, all the extra population growth in Auckland has chewed up available rental supply such that the rental vacancy rate has halved in 12 months, the largest fall of anywhere in the country.”