Median rent in Queenstown-Lakes up by $110 a week, Auckland unchanged from a year ago

By Greg Ninness

The national median weekly rent for newly tenanted properties increased by $15 a week (+2.7%) over the 12 months to the end of March this year.

The latest data, based on bonds lodged with Tenancy Services each quarter, shows the national median residential rent increased from $550 a week in the first quarter (Q1) of last year to $565 in Q1 this year.

However there were significant differences in the annual rate of rent increases between the main urban districts. Rents increased at a lower rate (up to 5%) in Whangarei, Auckland, Hawke's Bay, the Wellington Region, Timaru and Invercargill, and above 5% in all other districts.

Probably the most significant feature in the data is that the median rent in the Auckland region, which is the country's largest rental market by far, was unchanged at $600 a week in the first quarter year-on-year.

That was the second quarter in a row the median rent in Auckland has been unchanged from the same quarter of the previous year.

Median rents for newly tenanted properties within two Auckland Council Wards - Waitemata & Gulf and Maungakiekie-Tamaki, declined by $13 and $10 a week respectively between Q1 2022 and Q1 2023.

The low rate of rent increases in Auckland combined with Auckland Council data showing that the number of new homes being completed in Auckland is running at a record high, suggests supply and demand for rental housing are likely to be roughly in balance in the region.

However that balance between supply and demand is a fine one, and whether it continues will depend on migration trends, and whether or not the residential construction industry heads into an expected slump.

A migration-driven population surge in Auckland accompanied by a downturn in the number of new homes being built would likely result in a shortage of rental properties and a predictable flow-on effect on rents.

The biggest annual increase in rents over the year to March occurred in Queenstown-Lakes, which is also the second most expensive place to rent in the country (after Orakei Ward in Auckland) with a median rent of $700 a week in Q1 2023, up by $110 a week (18.6%) compared to a year earlier.

Around other major centers median rents were up 5.1% for the year in Hamilton, 8.3% in Tauranga, 1.6% in Wellington City, 5.3% in Christchurch and 5.8% in Dunedin.

The table below shows the annual and three monthly movements in median rents in all major urban districts.

*Note re bond data. The data in this report is based on the rental bonds lodged with Tenancy Services each quarter. This will mainly relate to new tenancies rather than existing ones. Because landlords will usually set rents for new tenancies at whatever rate the market will stand, this tends to set the market rate which other landlords will follow when reviewing rents for existing tenancies. This means this data is a forward looking indicator of where rents are likely headed.

This story was originally published on Interest.co.nz and has been republished here with permission.