Weekly rental prices soared 4.7% over the year to March – the strongest annual rate of rental growth recorded since before 2015.
This was according to REA Group’s PropTrack Rental Report March 2022, a quarterly rental report combining six key metrics to provide an up-to-date view of the rental property market and emerging trends.
Rising prices come amid ongoing low levels of stock available for rent, with new listings down by 12.5% from their 10-year average. The total number of properties available for rent in March 2022 was the lowest since August 2003 – falling 4% in March 2022 to be 24% lower year-on-year.
With low stock driving competition, demand has reached near record-high levels nationally after rising 37.1% year-on-year and reaching a historic high across the combined capital cities in March 2022. And although demand remains elevated in regional areas, there has been a slight pullback from its recent highs.
“The strong demand for rentals experienced in 2021 has continued over the first quarter of this year,” said Cameron Kusher, PropTrack director of economic research and report author. “Demand remains near record-high levels nationally, sitting at an historic peak throughout the combined capital cities in March 2022. The volume of properties listed for rent at a national level has continued to reduce over recent months, exacerbating shortages of stock and pushing the cost of renting higher.”
Kusher, however, noted some evidence that some of the rental pressures may be easing in certain regional areas.
“Sunshine Coast, Geelong, and Southern Highlands and Shoalhaven are three prevalent markets where several indicators suggest rental demand is slowing,” he said. “Other regional areas may see similar trends emerge as those who moved during lockdowns either decide to stay and potentially look to purchase rather than rent, while others may now look to relocate back to the major cities given that they have reopened and lockdowns have ended.”
Regardless, many Kiwis continue to find renting a tough proposition, due to limited supply and rising rental rates – and it looks unlikely that there is any significant relief on its way.
“In fact, with international borders reopened and migration re-commencing, we are anticipating a further tightening of rental supply over the coming months, which is likely to lead to further increases in rental rates,” Kusher said. “This is expected to be most prevalent in Sydney and Melbourne, the two largest rental markets in the nation and the two markets that have, until recently, been experiencing falls in rental rates.”
