Median housing rents have fallen for two months in a row, with the biggest falls occurring in Auckland

Important  Notice: The Ministry of Business Innovation and Employment has advised us that the data it supplied containing April's median rent figures was wrong. It has apologised for the error. We now have a revised version of this story, containing MBIE's corrected  median rent figures.

Housing rents declined for the second month in row in all three main centres, according to interest.co.nz's Housing Rent Monitor.

The national median rent was $350 a week in April, down for the second month in a row from its all time high of $365 a week in February and right back to where it was in April last year.

The same trend can be seen for median rents in the three main centres of Auckland, Wellington and Christchurch, but the trend was most pronounced in Auckland, the country's largest rental market by far.

Interest.co.nz tracks the median rents for three bedroom houses and two bedroom flats in Auckland, Wellington and Christchurch, which are calculated from tenancy bonds received by the Ministry of Business, Innovation and Employment.

Most of the bonds received would be for new tenancies, so the median rents will tend to reflect the rents being paid for newly tenanted properties.

In Auckland the median rent for a three bedroom house fell from its all time high of $597 a week in February to $580 in March and $550 in April.

That puts it back to where it was in April last year, but still up 10% on April 2013.

A similar trend was evident for two bedroom flats in Auckland, with the median rent dropping back from its all time high of $410 a week in February to $390 in April (see table below).

In Wellington the median rent for a three bedroom house was $500, down by $25 a week from its February peak and in Christchurch the median rent on a three bedroom house was $440 a week, down by $10 a week after sitting at its peak of $450 a week since May last year.

The fall in the national median rent was accompanied by a drop in the number of bonds received by MBIE, which fell from 13,818 in March to 8463 in April.

That suggests the fall in rents could be related to seasonal fluctuations in rental activity.

The first three months of the year are generally the busiest for new letting activity, with many students seeking to establish flats for the academic year around that time and many people who are moving for work related reasons also tending to shift early in the new year.

That surge in demand for rental properties early in the year could push up rents over that period, which then ease back as demand drops back to more normal levels at the end of summer.

However with property prices in Auckland continuing to set new records and showing no sign of slowing down, the fall in rents could be a concern to investors looking to expand their portfolios in the region, because it will likely reduce their investment returns, which will probably already be extremely tight on newly purchased properties.

Last month's REINZ/interest.co.nz Indicative Rental Yield Report  suggested investors could struggle to achieve gross rental yields of 5% on newly purchased properties in Auckland and a fall in rents would reduce those yields even further.

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