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Rent surges for apartments, national rent flattens

The cost of renting apartments, townhouses, and unit properties in New Zealand is more expensive than ever, according to Trade Me.

Apartments have seen a surge in popularity, with median weekly rent increasing 20 per cent in the last three years, according to the latest Trade Me Property Rental Index.

They have reached a new record of $460 a week, costing tenants $3900 a year more than three years ago.

Auckland apartments are more expensive than one to two bedroom houses, and demand is soon expected to push the median price to $500 a week, according to the index for August.

"As house prices steadily increase, more and more Kiwis have been looking at urban properties as a more affordable investment or first foot on the property ladder," chief executive Nigel Jeffries said.

"Since 2014, the average asking price of an urban property has jumped 34.3 per cent to $533,600 to match the increasing demand."

But it is a case that you are more likely to get what you pay for in cities. Jeffries said the smaller units in cities are proving popular because they are higher quality.

"Urban properties are typically warmer, drier and in a better location than your average house, and now tenants around the country can expect to pay a premium for them."

Nationally, median weekly rent remained at $450 for its ninth consecutive month.

Jeffries said: "To date, we're experiencing the lowest period of rent increases in five years with the annual rent growth up just 2.3 per cent.

"This is quite the contrast to 2016, when the annual rent growth was nearly double at 4.4 per cent."

This rise is a fraction of the inflation in house prices over the last year, which was 10.3 per cent according to the Reserve Bank inflation calculator.

Wellington and Auckland rental markets appear to have stalled, for now, according to Trade Me. The median weekly rent in Wellington in August was $450 in Wellington and $530 in Auckland.

Christchurch renters will have seen a larger increase in what they're paying. The median rent was up $10 a week since June to $400.

Larger house rentals have not seen the same stability. The median weekly rent has climbed 7.1 per cent in the last year to $750.

Jeffries said regional New Zealand experienced "a mixed bag" in August.

The West Coast saw the largest annual increase Trade Me has seen in a while, leaping 28.6 per cent to $270, he said.

Otago reached a new high of $410 per week, up 5.8 per cent since July.

Canterbury fell 1.3 per cent to $395 per week, along with Gisborne which saw a 19.4 per cent drop in median weekly rent to $270.

He said: "Gisborne and the West Coast are small markets which can be susceptible to big swings off the back of relatively small changes in the quantity and quality of properties entering the market."

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