'It must be very tough for renters:' Rising rents soar in a month, Trade Me data shows

Becky Saxton is worried her rent may rise when new insulation requirements kick in.
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Becky Saxton is worried her rent may rise when new insulation requirements kick in.

Ange Marsh was horrified when she handed in notice on her rental property and discovered that the landlord boosted the rent by almost 20 per cent for the incoming tenants.

The three-bedroom house was old, cold and not in a great part of Raumanga, south Whangarei, she said. She had been paying $275 a week but the landlord hiked the rent by $50.

"I thought that was disgusting because the house was definitely not worth it. Landlords are being so greedy these days."

Wage increases have not kept pace with "off the charts" rents, Trade Me Property says.
FIONA GOODALL/GETTY IMAGES

Wage increases have not kept pace with "off the charts" rents, Trade Me Property says.

Another tenant, Becky Saxton, said she had not had a rent increase since 2007 but the market was changing rapidly.

READ MORE: Living alone in Auckland gets pricier as weekly rent jumps

"We are trying to purchase our own home but trying to live and pay rent is hard enough without the rent prices going up. It's going to be hard when the landlords have to put insulation in houses and the cost of that will hit the renters as well."

New data from Trade Me shows that tenants outside the three biggest cities have experienced an increase in median weekly rents of 10 per cent over the past year.

Head of Trade Me Property Nigel Jeffries said the median rent per week for properties outside Auckland, Wellington and Christchurch had "jumped significantly" between March and April.

"To rent a typical property outside our largest cities is now a record $385 a week, up from $370 a month earlier. Compared to this time last year, these properties are setting tenants back an additional $1800 per annum in rent."

Jeffries said rents around the regions had risen steadily for three years. "In April 2014, the median weekly rent was $310 a week meaning an annual rent cost of $16,000. Since then rents have jumped 24 per cent or nearly $4000 more per year.

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"It must be very tough for renters, as the growth in the regions has been off the charts and shows no sign of easing, while pay packets aren't keeping pace."

NZ Property Investors Federation executive officer Andrew King said the figures should be regarded with caution. He said Trade Me's data, which is based on the asking price of properties on its site, could jump around.

But he said it was possible that some of the increase was driven by landlords who had not increased their rents for a while. "If they have had tenants for a while and haven't moved them up the can go up with a bit of a jump in some cases."

The national median weekly rent was unchanged in April, marooned on $450 for the fifth consecutive month. Compared to this time last year, rents are up 2.3 per cent, an increase of just $10 a week in the past year.

Jeffries said rents in Auckland hit a new record high in April. "Rents in Auckland are still lagging well behind the increases in house prices, but landlords have been able to pass on some costs to help pay their mortgages as the median weekly rent clicked up to $530 in April, up $15 since March.

"It's only making a small dent in mortgages though, renting a typical property in the Super City costs $27,560 per year compared to the city's average asking price of $925,300."

Jeffries said the Bay of Plenty's growth continued, with the region now the second most expensive place to rent, alongside Wellington. "The Bay hit a record $450 in April, up 12.5 per cent on last year. The other stellar increases were Wellington where it was up just over 11 per cent to $450 a week, and both Northland and Waikato were up 10 per cent to respective records of $385 and $395 a week."

The West Coast and Canterbury were the only regions to see rents drop compared to this time last year.

Jeffries said small houses, with one or two bedrooms, were in high demand from tenants across the country, creating higher than expected rents. "The median weekly rent for a small house in New Zealand hit a new record in April of $370, up just under 6 per cent on this time last year. Excluding Auckland, the median weekly rent for a small house is up 10 per cent to $330."

 

 - Stuff

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