The national median rent charged for newly tenanted residential properties remained unchanged at $600 a week in the March quarter for the fifth consecutive quarter, according to interest.co.nz's latest analysis of bond data from Tenancy Services.
This shows the national median rent first hit $600 a week in the first quarter (Q1) last year and has stayed there ever since. (See the graph below).
In Auckland, the country's largest rental market, the median rent has remained at $650 a week for six of the last seven quarters.
This would appear to contradict recent reports from property websites such as Realestate.co.nz and Trade Me Property noting the average and median rents being advertised on those sites were in decline.
So if advertised asking rents are falling, why isn't this showing up in bond data, which records the actual rents being agreed to when tenants sign up for a property?
The two most likely reasons are a timing lag and value drag.
There is usually a timing lag of at least a month or two between a property being advertised for rent and the bond being sent to Tenancy Services.
So if the rents being agreed are declining, this might well show up in the bond data over the next few months, although there was no sign of that happening in the monthly bond data for March, as well as for Q1.
The other possibility is value drag.
Most people looking for a property to rent will have an idea about how much rent they can afford to pay at the back of their mind when they are searching, and will try to get the best property they can around that amount.
If rents are falling, they may not end up paying any less rent, but sign up for a slightly better property than they might otherwise have found at the same price point when rents were higher.
So the rent they pay stays the same, but the value they get for their money has crept up a bit.
Either way this is good news for tenants, who either get the benefit of lower rent, or take advantage of a higher standard of rental accommodation at no extra cost.
It's not such good news for landlords though because one thing is clear. Regardless of whether rents are declining slightly or are static, there is absolutely no sign of any rental growth in the current market.
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