National median rent up $30 a week in year to May but now flattening out

May's national median weekly rent for newly tenanted properties up $30 year-on-year to $600

Property / analysis

May's national median weekly rent for newly tenanted properties up $30 year-on-year to $600

17th Jul 24, 11:12am by Greg Ninness

Residential rents appear to be flattening out after a period of steady growth last year.

According to the latest bond data from Tenancy Services, the national median rent for newly tenanted properties was $600 a week in May this year, up by $30 a week (5.3%) from May last year.

However all of that increase occurred in the second half of last year. The national median rent hit $600 a week in December last year, staying there ever since, apart from January when it briefly popped up to $608 a week before dropping back to $600 in February.

As the graph below shows there were substantial rent increases in the second half of 2021, followed by a period of relative stability in 2022, before steadily rising in 2023 and then fattening out again in 2024.

While the number of properties being newly tenanted is following the usual seasonal trends, peaking at the beginning and middle of the year, on an annual basis they also appear to be flatlining, with 11,748 bonds lodged in May this year, up by just 60 (0.5%) compared to May last year.

That suggests the balance between supply and demand for rental properties may be in relative equilibrium for the time being.

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14 Comments

by K.W. | 17th Jul 24, 11:27am 1721172429

Investors can now buy existing properties for lower prices and obtain higher rental yields than when they were forced to buy overpriced brand new properties. There are now a lot more older, and thus cheaper properties on the rental market instead of expensive new builds (which are piling up unsold on the market). This will bring down rents over time. Not so great for developers looking to offload their slummy shoeboxes to what they thought were captive investors though.

Investors will also be looking to buy older houses on sections to which they can add a minor dwelling under the new rules. These new small homes will also bring down rents over time. There is no ability to value add or increase rental yields over time if you buy a 70 sqm townhouse with only enough land to store your rubbish bins.

by kiwi_overseas | 17th Jul 24, 11:51am 1721173917

ABSURD. A 5.3% increase in rent forced on the poorest in society by successive govts bad policies.

NZ already has one of the highest rent/income ratios in the OECD.

And we have 100,000 homeless in NZ (wide HUD definition from truly homeless to cramped into unsatisfactory dwellings), that's 2% of the population.

We are circa 25,000 short of social houses & circa 1,500 in emergency housing.

IT IS A CRISIS.

National's zoning of 30 years land will help but only in the long term. The change in zoning to allow granny flats will help.

However, we need to:

a) reduce the immigration rate to something sustainable

b) bring in as many temporary houses/cabins/granny flats/prefabs as possible until the permanent social and private houses are built.

c) provide sufficient funding to Kianga Ora and the community providers to get the houses built (the govt is stuffing around with KO while the country burns)

by Baywatch | 17th Jul 24, 12:20pm 1721175627

And the government priority's? are that these homes are too warm....

Why are people not rioting on the streets....

by Middleaged | 18th Jul 24, 2:44pm 1721270651

We can heat them by burning more tobacco.

by John Mendel | 17th Jul 24, 12:04pm 1721174679

Rent is definitely going to be more expensive than mortgage, my new neighbour is paying $800 for 3 beds per week, not far away from my mortgage payment

by huttman | 17th Jul 24, 1:18pm 1721179124

it's cheaper rent than buying, especially when interest is up.

Another point, comparing rent to mortgage payments are not very fair, some have mortgages, some don't. some has bigger mortgages while others have smaller mortgages.

by mfd | 17th Jul 24, 1:52pm 1721181122

Not far from your mortgage payment, but you also pay rates, home insurance and maintenance on top of that which would add a few hundred a week over the long run. Plus you likely have $100k+ of capital, possibly much more, sunk in the house with the associated opportunity costs (something like another $100 per week for every 100k).

by IT GUY | 17th Jul 24, 4:49pm 1721191760

for the last few years interest payments have been dead money, its been better to wait

by starrider | 18th Jul 24, 10:29am 1721255390

John, lay off the wacky backy.

To rent an average 3 bed $800k house is around $600 per week.

To buy that same house with 20% down means a weekly cost of around $1100. (Mortgage, rates, insurance, maintenance).

Renting a median house is never going to cost more than buying a median house.

by Zwifter | 18th Jul 24, 9:53am 1721253199

So predictable, rents only go one way while your outstanding mortgage goes the other way.

by starrider | 18th Jul 24, 10:33am 1721255604

While your rates go up 10% to 20%.

Insurance costs go up 20% to 50%.

Mortgage interest rate doubling- going from 3% to 7% rate.

Maintenance costs up 10% (but currently dropping).

by wingman | 18th Jul 24, 2:31pm 1721269891

Your own house is yours, no one else's. And long as you pay the mortgage no one can give you notice....unlike a renter.

Shifting house isn't cheap, it's a huge disruption.

by wingman | 18th Jul 24, 10:00am 1721253631

Rents up...but didn't Labour economic 'genius' Robbo, tell us rents were going down after his decision to tax landlords?

by Middleaged | 18th Jul 24, 2:47pm 1721270850

No. Rents would be reduced by the reinstatement of tax breaks to landlords that are being passed through to renters.

Tui beer, anyone?