Many tenants came out of Lockdown 2020 with an appetite for change. Weeks spent stuck inside rental homes seemed to really heat up the market once restrictions were lifted. What impact will the current lockdown have, and will there be a similar shift this year?
The warmer months have traditionally been busier than winter, and as we move into Level 3 on the first day of spring there is anticipation about where the rental market is heading this time around.
July had proved an interesting month with demand for rentals increasing by 1% nationwide compared with the same time last year. Rents had, for a time, remained stagnant, but began rising again in June, with the median weekly rent reaching $545 and climbing again in July.
According to Trade Me’s latest rental price index, the national median weekly rent reached a new high of $550 last month, marking the second record-breaking month and the most significant growth since Trade Me began recording rents in 2015.
Demand is still outweighing supply, with the number of rentals down by 8% nationwide last month compared with July 2020. This growth won’t stop any time soon, with supply unable to keep up with demand.
Upper Hutt and Lower Hutt overtook Wellington City & Suburbs to become the most expensive area to rent in the Wellington region last month, as tenants continue to look outside the city fringe to get more bang for their buck. Remember when Porirua became the top spot in July?
The median weekly rent in Upper Hutt reached $625 last month, up 30% on July last year, $30 a week more on average than renting a property in Wellington City.
The median weekly rent in Lower Hutt also reached a new high of $600 last month, increasing by 9% year on year.
Getting some distance between home and the crush of the city holds a lot of sway - although tenants are likely to pay similar rent to city living, they tend to get a larger home for their money, with more space for the increasingly necessary WFH (working from home) setup. Further afield the cost of a lengthy commute seems to be a fair exchange for cheaper rent.
Looking at the wider Wellington region as a whole, rents increased by 7% in July compared with the same month in the prior year.
In July, demand for rentals in the Wellington region was down by 2% last month, with the most popular rental in the area a two-bedroom house on Meadows Avenue in Lower Hutt for $490 per week fielding 63 inquiries in its first two days.
If you are having any difficulty at all managing your rental property or portfolio, or if you have any questions, please do not hesitate to get in contact with Oxygen Property Management.
We’re happy to help and offer free no-obligation rental appraisals and advice.
