Rise in Whanganui rent prices as property owners get caught in ‘balancing act’

There are far more rental properties available in Whanganui compared to last year. Photo / Doug Sherring

Whanganui experts say there are no quick fixes when it comes to rising rent prices, one of many issues currently hitting consumers in the pocket.

New data from Trade Me shows the median weekly rent in the Whanganui district was $465 in December 2022, up by 3 per cent on the same time the year before.

In the Manawatū-Whanganui region, it jumped from $470 in January 2022 to $515 in 2022, an increase of $45. That is the second-highest increase in the country, behind Northland at $60 per week.

Property Rentals Whanganui owner Kathleen Vicelich said there was still demand for rental properties but high prices had limited it.

“When it comes to this further hike, it’s pinching people’s budget. Can they afford it without getting into trouble?

“I try and keep things at the market rate but there are some pretty outrageous prices out there.”

While there were probably some in the rental sector, it wasn’t simply a case of greedy landlords, Vicelich said.

“Interest rates have increased, [council] rates will be going up in July, and then landlord insurance, which is simply a must, has also increased.

“You have to cover those costs and make some money for maintenance, which is inevitable.

“We’re seeing reports on the news of people now having to pay $800 a week for their mortgage. That’s just insane.”

Middle- and low-income earners - “quite a high percentage of the Whanganui population” - were affected by the rises, Vicelich said.

Whanganui Budget Advisory Service manager Sandy Fage said she was seeing a lot of people sharing properties or moving back in with parents or family.

Multiple families were also sharing one residence.

“That’s because they can’t afford the rent on their own. They are trying to share that cost,” Fage said.

“It just adds so many complications and stress to relationships.

“If demand for rentals has dropped, there needs to be more investigation into why that is. I don’t think it’s a good thing. It’s purely because people have said ‘I can’t afford $560 a week’.”

Whanganui Budget Advisory Service manager Sandy Fage says there are no quick fixes when it comes to current financial pressures. Photo / Bevan Conley

There was a huge amount of supply at the moment, meaning potential tenants had a lot more choice compared to a year ago, Bayleys Whanganui manager of property management Chelsea Mooyman said.

“From our perspective, prices are starting to stabilise and not increasing at the rates they were, that’s for sure.

“People don’t want their properties sitting vacant for long periods. If they want to get them rented they have to be realistic.

“When you’ve got 70-plus listings on Trade Me compared to times last year when there were only 20-odd, that’s a big difference.”

Mooyman said it was a balancing act for property owners, who were trying to cover increasing costs while making sure the property could be rented in a timely manner.

In her portfolio, the average rent on a three-bedroom house was around $500 per week.

“In March 2020, I rented a three-bedroom for around $380 [per week].

“For just a couple of years, that’s a substantial increase.”

Property Brokers Whanganui property manager Emma Fowler said a lot of stock had come up heading into the first part of 2023.

There had been slow movement on listings priced at $600 or more per week.

“When it’s over a certain price point, I think it does put people off,” Fowler said.

“You’re going to have to have multiple incomes to be able to afford it.”

She said Property Brokers had to find tenants for around 15 rental properties in the first half of January.

“We’ve managed to fill about half of them.

“Compared to the last couple of years, there are more vacancies and more people moving.”

Whanganui's median rental price was $465 in December, up by 3 per cent from the same time the year before. Photo / Bevan Conley

Trade Me data revealed rental listings were up by 35 per cent in 2022 in the Manawatū-Whanganui region, with demand down 27 per cent.

The median weekly rent for a small property (1-2 bedrooms) in the region was $450 in December, up by 20 per cent year-on-year.

For a medium-sized property (3-4 bedrooms) it was $550, an increase of 6 per cent.

Vicelich said median prices didn’t always reflect a property’s true value.

‘What happens in the private sector, as well as with property managers, is people look at the overall Whanganui median rate and base a price on that, not on the suburb or what the property itself has to offer.

“You can’t compare an older average house to a brand-new build but people do.”

Fage said she knew a couple of landlords who had made the conscious decision not to “suck their tenants dry”.

“They’ve said their tenants are wonderful so it’s a win-win. They are getting a nice place at a good price, and the landlords are getting someone who is respectful of it.”

Like Vicelich, she said the middle class were also suffering at the moment.

They could get more vocal, especially with an election not far away.

“When you look at the things that need to happen to make things better, none of them happen quickly,” Fage said.

“There are no quick fixes. Politicians say ‘we have a plan’ or ‘we are going to look at this and review that’, but there is going to be another year of pain.

“I was looking at my vege garden the other day and thinking I should get it together and actually grow potatoes. Maybe we need to get back to some more basic stuff.”