Wellington's 'insulting' rental market even worse this year

This shed is being rented for $220 a week in central Wellington. Photo / 1News

Wellington's rental market always goes crazy over summer as students start back at university for the year and leases come up for renewal, but this time it's even worse.

Inflation has hit a 30-year high of 5.9 per cent putting the squeeze on budgets and Omicron is starting to spread through the community making viewing properties trickier.

One expert expects rental prices to rise even further with the power balance firmly tipped towards landlords.

TVNZ Breakfast reporter Abbey Wakefield recently revealed one Wellington rental hopeful applied for 55 flats before securing an outside shed to sleep in.

It acts as the fifth bedroom in a four-bedroom house, which has a bathroom and kitchen inside.

"As you can imagine, it would get a little bit cold in winter", Wakefield told Breakfast.

Inside the shed. Photo / 1News

The tenant is paying $220 a week, excluding expenses, for the shed in central Wellington.

Victoria University of Wellington Students' Association president Ralph Zambrano said the shed was "insulting".

"I think it very much speaks to the fact that students are being used as cash cows and we are being utterly disrespected."

Zambrano said this year was worse than others because students were facing a snowball effect of Covid-19, unaffordable rents, fixed incomes, and inflation.

The latest Trade Me figures from December show Wellington City's median weekly rent was $640, just shy of its all-time high of $645 recorded in October.

The most popular rental in the country for the same month was a three-bedroom house in Newtown for $700 per week. The property received 125 enquiries in its first two days online.

Meanwhile, Porirua remains the most expensive district to rent in the country after its median weekly rent hit a record high of $700 in December.

Porirua. Photo / 123RF

New Zealand's national median rent climbed $40 a week in 2021 to reach $560 in December.

OneRoof editor Owen Vaughan expected those prices to continue to rise even further.

Finding a rental in Wellington would be more difficult this time around with the likes of Omicron and inflation, he said.

Vaughan said people might be feeling nervous about joining large crowds to view properties and not have as much time to do due diligence in order to get "in and out as quickly as possible".

Aspiring property owners would be looking at rentals though the lens of how much they could save for a deposit, with house prices also rising and well over the million-dollar mark in Wellington now, Vaughan said.

Rising inflation would also disproportionately affect the lower end of the market, he said.

"If your rent goes up, that's going to take away a certain amount of your budget. Then there is rises in petrol prices, everyday goods, groceries- that's also going to cut into what people have to spend. If you don't have enough left over, that's going to put pressure on you."

Renters United spokesman Ashok Jacob said Wellington's market kept getting worse.

For as long as the focus on supply was the only solution being considered, things would just get worse for a long time, because supply was a long-term fix, he said.

"The things that are actually hurting people are the fact that rent price increases are as unregulated as they've ever been. That's something we've seen happening for the past 20 years. So the fact that this keeps getting worse and worse is not surprising."