Median rents have dropped back from their summer peak and the number of new tenancies is at a record low

By Greg Ninness

An unusually low number of new residential tenancies commenced in June, and median rents declined for the second straight month in what may be further signs housing supply is catching up with demand.

According to data from Tenancy Services, the national median rent was $535 in June. That's down for the second month in a row from its peak of $550 set last summer.

Rents usually peak over the summer months when demand for rental properties is greatest and then ease back slightly over the winter months, so the drop in median rents over May and June was not surprising.

The national median rent in June was still $35 a week higher than it was in June last year.

However what was unusual was the very low number of new tenancies taken out in June, with bonds received for just 10,893 residential tenancies during the month.

That was the lowest number of bonds received in any month of the year and the first time it has been below 11,000 since current records began in 2012, apart from the lockdown affected months in 2020 and 2021.

The graphs below shows the trends in median rent and number of bonds received each month.

The fact that rents continued their normal winter decline while the number of properties tenanted dropped to a new low suggests the rental market may be easing, with supply starting to catch up with demand.

If the drop in the number of tenancies was caused by a shortage of available rental properties you would expect rents to be rising.

However it's probably still too early to be calling a trend. At least another couple of month's data will be needed before we can be sure which way the rental market is headed.

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