With our borders now fully open, the mandates ended and signs of life being re-injected into the city, the question now is, will the rental market fully recover by the new year? The time it takes to find a resident has reduced from 6-8 weeks to 4-6 weeks, while supply has also decreased with roughly 850 listing currently active in Wellington City, which traditionally has had a shortage of rental homes and high rent as result. Last month, the national median rent climbed by 2% month on month to $580 per week. Renters, who undoubtedly relished the promising past few months of price relief we witnessed, will find this disappointing news. Looking around the country, Christchurch City (with a similar population to Wellington) has approximately than 750 active listings, whereas Auckland has roughly 2,500 active listings.
So, what is happening to the rental market?
Trade Me figures show nationwide rental listings increased by 13% last month compared to the previous year. The supply in the rental market has been steady over the previous few months, with a few locations around the nation consistently experiencing enormous year-over-year gains. For the third consecutive month Wellington led the charge, experiencing the greatest increase in rentals nationwide, up 49% year over year whilst demand was down 10% year on year. The range of stock, predominately in the 1–2-bedroom market has given residents a range of choice with modernness and location being their two deciding factors. As of 20nd of September, there are over 850 active listings in the Wellington region, with 1–2-bedroom properties making up over 450 active listings on TradeMe. This is over 50% of the existing stock in Wellington City and is high for this time of year.
The average weekly rent in the Wellington region increased 3% year over year to $610 in July. This represented an increase of 2% from the previous month. The highest median weekly rent was observed in Porirua at $690, followed by Lower Hutt ($630) and lastly, Kapiti Coast at $620 whilst Wellington CBD saw no change month on month at $600. The median weekly rent for apartments saw a decrease year-on-year of -3.7% to $520 per week, townhouses saw no change year-on-year whereas units increased by 2.1% to $490.
What can we expect as we move closer to summer?
As we go into the warmer seasons of the year, the market is likely to experience a rush of activity. It will be interesting to see how the seasonal rush affects the market given that supply and pricing are already under pressure during this traditionally slower time of year. Recently, we have observed a third of enquiries from foreign renters considering moving to Wellington; roughly 33% of these inquiries are from families in South Africa, Australia, the United Kingdom, and Germany. Diplomats in Wellington have also begun their search for new ambassadorial residences with multiple embassies looking at renting large executive homes for the next 3 – 5 years.
As more people from abroad enter the country on working-holiday visas, we anticipate a steady decline in the number of current listings and an increase in demand especially when the international students arrive for the new year. We anticipate a spike in rent prices as a result of the anticipated increase in foreign migration during the upcoming year, particularly in the central city region where the supply of 1-2-bedroom houses is abundant and the pace of demand is slow.
I emphasised in a few earlier posts how crucial it is to market your home to the greatest possible degree in order to make it stand out from the competition. This strategy has not altered, and it is now more crucial than ever that it be adopted to deal with Wellington’s rapidly increasing rental stock. One significant trend we’ve noticed is that more and more potential tenants are heavily relying on the 3D-tour to determine whether they’re ready to inquire and, ultimately, apply.
If you are having any difficulty at all managing your rental property or portfolio, or if you are just after some assistance, do not hesitate to get in contact with me. Tommy’s Property Management is pleased to offer a free, no-obligation rental appraisal and advice. No conversation is too difficult, and we are more than happy to do our best to assist.