The number of residential properties being newly tenanted significantly increased in the September Quarter (Q3), although rents remained flat overall.
Tenancy Services received 42,102 new tenancy bonds from throughout the country in Q3, which was up 4.2% compared to Q3 last year, and up 12.1% compared to Q3 2024.
It was also the most bonds received by Tenancy Services in Q3 since interest.co.nz started tracking the data in 2021.
On the other hand, rents have remained remarkably stable for almost three years.
Based on bond data, the national median rent on newly tenanted properties was $595 per week in Q3, down from $600 a week in Q2 this year, but up $5 a week from Q3 last year.
The national median rent on newly tenanted properties has remained between $590 and $600 a week since the beginning of 2024, suggesting rents have remained flat overall for almost three years.
The above figures point to a reasonable increase in rental activity over the last two years while overall rents have remained stable.
That suggests the supply of rental properties is keeping up with demand from tenants, but landlords should not expect any growth in rental income.
However, one bedroom units are the big exception to that scenario.
The number of bonds received for one bedroom units/apartments exploded from 1782 in Q3 last year to 2988 in Q3 this year, up by a whopping two thirds (67.7%).
Over the same period, the median rent for one bedroom unit apartments increased from $450 per week to $466, up 3.6%.
The increase in letting activity for one bedroom units could be driven by several factors, including changing demographics with increasing demand for accommodation from single people and childless couples, and/or an increase in supply as more multi-unit projects are completed, making one bedroom units more widely available, helping to satisfy a latent demand.
At the other end of the scale, fewer three bedroom houses are being tenanted and rents for that type of property are stable.
Tenancy Services received 8391 bonds for three bedroom houses in Q3, down from 9942 (-15.6%) in Q3 last year, while their median rent has been unchanged at $650 a week for all of this year, and has been stuck on that figure for eight of the last 11 quarters, suggesting rents for that type of property have been stable for almost three years.
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