Famous for rising faster than inflation and outpacing wage growth, rents peaked in early 2024 when supply started to catch up with demand.

The changing dynamic saw rental prices on Trade Me Property drop for eight consecutive months. However, the worm turned in October, with latest data showing a small jump in the national median weekly rent – up $5 to $635, an increase of 0.8%.

Landlords further South will be feeling better about their investments. Marlborough ($35 month-on-month increase to $585 per week), Taranaki (up $10 to $610) and the Waikato (also up $10 to $590)

Auckland landlords, not so much – medium rents remained static at $675 p/w. Bay of Plenty has now overtaken Auckland as the most expensive region to live in with a median weekly rent of $680.

Summer rent rise?

Commenting on the figures, Trade Me Property customer director Gavin Lloyd said rental prices usually rise in the summer, though he believed soft demand could work against this historic trend.

“There tends to be stronger demand for places to rent as the weather warms up and people move around. But unlike in more recent years where supply hasn’t kept pace with demand, this year we are in a different position with supply up 44%.

“There’s a few reasons driving the surplus supply, including record numbers of people, particularly younger people, leaving the country while others are choosing to stay at home longer or live with relatives while unemployment and the cost of living both remain high,” he said. “While we’ve seen the number of listings fall 4.4% since skyrocketing mid-year, listings remain 44% up on the same time last year, meaning there’s still plenty of rental properties available for those seeking a new place to call home.”

Departures set record

The lure of Australia as a place to live and work remains strong.

A record number of New Zealand citizens left the country in the year to September, and about half of them went to Australia, according to figures published by Stats NZ.

New data shows the country recorded a net migration gain of 44,900, which was down on the  provisional peak of 136,300 recorded in the year to October 2023.

Stats NZ said the number of people moving to New Zealand was also down. There was a net loss of 54,700 New Zealand citizens in the year, driven by 79,700 departures and 24,900 arrivals.

ASB chief economist Nick Tuffley said an improvement in the economy next year could help retain people, but there was a challenge posed by the labour market being tough, while Australia’s was comparably healthier.

“We do need economic conditions in New Zealand to be a bit more favourable to help hold on to people. That outflow of New Zealanders has been very strong and we’re still not seeing material signs of it turning around,” Tuffley said. “For the next while we would expect to see net migration figures continuing to weaken. New Zealand is not as attractive to new arrivals and you still have that challenge of a high outflow of people. That’s likely to remain fairly elevated until we see the economy turn around and give a stronger reason for people to stay.”

Bigger properties, bigger rent falls

Tenants looking for bargains should consider renting a larger property in New Zealand’s main metropolitan areas. Properties with five-plus bedrooms recorded sizable decreases in the median weekly rent.

Prices fell by more than 8% in both Auckland and Wellington, while Christchurch recorded a drop of 2.9%.

“These big rental properties, with their relatively bigger rents, simply don’t have the same appeal in the current market,” Lloyd said.

Necessary changes

According to a report titled Are flying Kiwis fleeing? published by think tank The New Zealand Initiative, the country is struggling to provide things that are important to people, including better paying jobs, more affordable housing, better infrastructure, higher educational achievement, and access to hospitals and GPs.

Until the situation improves, we should expect to see more young Kiwis choosing to live and work overseas.

With the supply of rentals up year-on-year, tenants are in a strong bargaining position.

Call 0800 GOODWINS to see how small improvements to your property can increase chances of renting success.