20 February 2015
New Year kicks off with big jump in rents
Weekly rents leapt 9 per cent in January compared to a year ago and the national median rent rose to $420 per week, according to the Trade Me Property Rental Price Index out today.
Head of Trade Me Property Nigel Jeffries said the rental market was “stable and relatively quiet” throughout 2014 but looked to be sparking into action. “The 9 per cent year-on-year increase in January is the largest single-month rise we’ve recorded over the past five years. Median weekly rents clicked up $20 per week between December and January to a record high of $420 per week. That’s grim news for tenants.”
Mr Jeffries said the rental market was responding to pressure from landlords chasing better yields for investment property as a function of relentless growth in property prices. “It was more a question of when, not if, landlords were going to start recovering some level of yield. It looks like that signal has flowed into the market this month and started to sting tenants in the pocket.”
Looking at the long-term trend, the differential between median rents and property price expectations over the past five years has narrowed significantly as a result of this January rise in rents. The Trade Me Property Price Index for January reported a 25 per cent increase in asking price since 2010, with median rents rising by 24 per cent over the same period.
As predicted by me: