The pressure is on for people looking to rent in Queenstown. Photo: RNZ / Marika Khabazi
Tenants looking for a new place to live face less competition at the moment - and that may be because of the drop in immigration.
Trade Me said on Thursday that asking rent prices had stabilised in August after two months of declines.
The median weekly rent across the country was $640 and prices were 3.2 percent higher than in August 2023.
The number of available rental listings was up 38 percent, compared to a year earlier. But demand was down 13 percent compared to July and 36 percent compared to 2023.
"We've seen a step change in market dynamics this year with increasing supply coming at the same time as reducing demand," said Trade Me Property's customer director Gavin Lloyd.
"While we've seen a small drop-off in supply from July it's still tracking strongly compared to demand making it a kinder market for renters than in previous years."
Auckland and Bay of Plenty were the most expensive regions to rent in the country, at $675 and $670 a week, respectively.
The Otago region had an increase in asking rent of 4.8 percent between July and August, the only region of the 15 Trade Me Property monitors to experience increases above 2 percent across the month. Year-on-year, rents were up 16.1 percent.
Within the Otago region, Queenstown Lakes renters are facing a particular squeeze.
"Renters in Queenstown Lakes especially may feel their wallets are a little lighter with the median weekly rent increasing $170 between July and August to $950 a week - that's a significant additional cost to cover and if it doesn't ease up amounts to close to an extra $9000 a year," Lloyd said.
"While these increases will be unwelcome news for tenants it will be interesting to keep an eye on how big increases in supply in the Queenstown Lakes District - up 232 percent year-on-year - will impact rents, particularly when it outpaces demand - up 18 percent year-on-year."
Canterbury had record high rents for two months in a row. Its median weekly rent was up $30 over the year.
Infometrics chief forecaster Gareth Kiernan said the slowdown in migration into the country had been marked, down from 136,743 people in the year to October to 67,199 in the year to July.
"Put another way, population growth was 3 percent a year in September 2023 and 1.8 percent by June 2024.
"We know that, in general, the people coming into the country were not buying homes, partly because the migration mix was more skewed towards lower-skilled and lower-income people than we would normally expect, because the government had relaxed the migration criteria due to the extreme labour shortages suffered during the pandemic.
"So it's likely that demand for rental properties was particularly elevated last year - a conclusion that is reinforced by Stats NZ data showing that rental inflation for new leases accelerated to as high as 7.2 percent a year in September 2023."
He said it seemed that people were more likely to move between rental properties during tough economic times.
"In the wake of the GFC, bond numbers initially rose - which could reflect people moving to somewhere cheaper as economic conditions deteriorated. After that initial burst, they were mostly subdued through until about 2015, apart from another small rise in 2011 - which might have been post-quake related.
"However, I'd suggest that migration or population growth is a stronger driver than economic conditions - in 2003/04 when both the economy and net migration were strong, bond numbers rose, suggesting that the latter is a more important determinant."