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Slight Dip In Rent Levels

Fuseworks Media
Fuseworks Media

23 June 2008 - The national median rent level has dipped by five dollars a week to $295 according to the latest quarterly report on the residential rental market by the University's Real Estate Analysis Unit.

The record high reached for rents at the start of the year was $300 a week. Director of the real estate analysis unit Professor Bob Hargreaves says the slight drop in the median rent level is somewhat unexpected because rents had been rising steadily last year and during the first months of this year.

The dip in rents represents a 1.6 per cent fall for the quarter, the rental market survey reports. On an annual basis the national median is still well up at 5.36 per cent more than inMay 2007.

Professor Hargreaves says commentators on the property market have noted that a significant number of would-be vendors have taken their houses off the market and chosen to rent them out instead.

"The drop off in the volume of house sales of around 50 per cent compared to sales for 2007 appears to reinforce renting as the better option," says Professor Hargreaves.

"As house prices decline, renting may be a more attractive option for some households than buying. However, in the medium term, history shows buying is normally the most attractive option, particularly when the period of ownership is over five years," he says.

A comparison between rents for apartments in Wellington and Auckland shows that the capital city market is more robust, he says, possibly due to an oversupply in some sections of the Auckland apartment market. The median weekly rent for three-bedroomed apartments in Wellington is $600 compared with $435 in Auckland, for two bedrooms in Wellington the median is $522 compared with $360 in Auckland and for one-bedroom apartments the median rent is now $288 and $280 for Wellington and Auckland respectively.

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