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The rise of bedroom diversity in Auckland’s rental market

June 29, 2017

The rise of bedroom diversity in Auckland’s rental market


Auckland’s rental market housing stock, which once was almost half made up of standard three-bedroom homes as rentals, has changed drastically over the past 20 years. In 2017, one-bedroom properties are fast rising in popularity and the number of houses with four or more bedrooms has increased by 300 percent since 1997.

Barfoot & Thompson, interested in delving further into Auckland’s rental market trends, undertook an analysis of bonds lodged with the Tenancy Tribunal between 1997 and the 31st of March 2017*. The analysis accounted for 744,216 rental transactions during the almost 20-year period.

In the first quarter of 2017, 35 percent of all bonds lodged were for three-bedroom homes, compared with 46 percent in the same period of 1997, representing a 24 percent reduction in the proportion of three-bedroom homes.

“The three-bedroom bungalow or villa we tend to picture as the standard rental is quickly waning. When we look at what is being rented, the home type, size, and number of bedrooms has changed markedly over a period of just 20 years”, says Barfoot & Thompson Director Kiri Barfoot.

“Today, around one third of all tenancies are for three-bedroom homes, whereas these were close to half of Auckland’s rental property market 20 years ago. Tenancies are now spread across properties with any number of bedrooms, with the biggest change being for properties with the fewest and most number of bedrooms.”

Between 1997 and 2017, the proportion of one-bedroom property tenancies increased by 85 percent (13% vs. 24%), and now represent almost a quarter of all properties let within the Auckland region. The proportion of four/five plus-bedroom property tenancies increased by 300 percent (4% vs. 12%).

To March 2017, the North Shore had the largest share of rental agreements for four or more bedroom homes, making up 23 percent of its rentals, and Auckland City had the largest share of one-bedrooms at 36 percent. Waitakere had the least one-bedroom rentals, at just four percent.

“Auckland’s housing needs have changed. The drivers of this have been changing family structures, increasing international immigration and multiculturalism, and evolving attitudes to lifestyles and expectations among Auckland’s population.

“Combined with this shift in what renters need and want, the housing stock itself has been evolving. This is evident in new developments, such as the Antipodean in the CBD, with a range of different sized homes being integrated into the plans.

“Another interesting trend we noticed in the data is that it’s only recently that the proportion of one-bedroom and four or five-plus bedroom properties being rented increased. The number of bedrooms had been fairly stable before that. Our data also shows a large increase in properties with more than four bedrooms compared with 5 years ago.”

The data also revealed a decline in the total number of bonds lodged across the city. Comparing the same three-month periods, 8840 bonds were lodged in 1997, compared with 6605 in 2017.

“Fewer bonds lodged doesn’t mean fewer people are renting, as a bond is only lodged with new rental agreements. In fact, the opposite is true. As Auckland’s population grows, more people are renting.

“Our data shows people are staying in rentals for longer and therefore even with more people renting, bonds aren’t being lodged as frequently. Under Barfoot & Thompson property management, the average tenancy is around two years, having increased from about 18 months over the last few years.

“Auckland’s rental market is certainly changing, and as Auckland’s largest private property management company we support this. Better, more diverse housing stock, as well as more professional service for landlords and tenants is important for Auckland to thrive,” concludes Kiri Barfoot.


ends

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