Warning: Wellington tenants will feel the pinch

Thursday, 14 February 2019

The pressure is going on Wellingtonians looking for a house to rent.

The city's average asking rent on Trade Me has hit a record $595 a week, $45 more than rent in Auckland city.

Trade Me's head of rentals, Aaron Clancy, said rents had 'exploded' in the capital in recent months.

'It's a simple supply and demand equation - the supply around Wellington is just not keeping up and it's even tougher at this time of year as students move back for the university year and ramp the demand up further.

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'It's not just the city where rents are increasing either, the average rent across the Wellington region jumped $30 from December to January and was up 10 per cent on last year to a record $550 per week. This is a significant monthly increase and tenants are going to be feeling the pinch.'

He said the number of Wellington rental properties listed on the site fell 4 per cent in January compared to January 2018, while inquiries lifted 7 per cent.

'As a result, we're seeing heavy interest in Wellington rental listings within hours of appearing on-site.

'The most popular rental in New Zealand in January was a one-bedroom unit in Newtown near the city which fetched 146 inquiries in just two days on-site.'

Auckland renters are also under pressure - the median rent in the country's biggest city hit a record $555 a week in January.

Are you trying to find a Wellington rental? Email susan.edmunds@stuff.co.nz

Clancy said January was a busy time for the Auckland rental market, with 15 per cent more inquiries than the year prior.

'The median weekly rent in Auckland city remained at its all-time high of $550 per week in January, unchanged on last year. We're seeing a lot of tenants in Auckland look further afield than the central city in search of cheaper rents.

'The most popular Auckland rental in January was a three-bedroom home in Northcote which received 101 inquiries in the first two days on-site.'

Economist Brad Olsen, of Infometrics, said the jump in Wellington rent was not just because of the number of students looking for homes for the new year.

'What we're seeing is the Auckland housing market has already started to come off a bit more while Wellington is picking up pace. Wellington house prices are growing a lot faster and we're seeing people needing to service higher mortgages, so that's pushing rent costs up a lot more.'

He said there was also more building activity happening in Auckland, which helped supply to come closer to meeting demand.

While Wellington had population growth, too, there was not as much property development happening.

Before the November 2016 earthquake many office buildings had been set to be converted to apartments but when the earthquake removed much of the city's office stock that was put on hold, he said.

'Everyone said 'we need new offices' so that put a stop to a lot of those office conversions. We haven't seen as much growth [in available housing] as we would have expected to see pre-earthquake.'

Wellington city renters now face much higher rents than those in Auckland.

Nationwide there was a 16 per cent jump in the total number of Trade Me rental property inquiries year-on-year.

Clancy said it was probably due to first-home buyers taking longer to save a house deposit. Those households remaining in rental properties put pressure on supply.

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