Quarterly rental update: Pace of Auckland rent rises easing
The pace of Auckland rent rises has slowed according to the latest data insights from Barfoot & Thompson which lets and manages nearly 16,000 properties across the region.
The cost of renting a typical three-bedroom* home in Auckland rose 3.9%, or by $20.77, year-on-year during January to March 2018, the lowest rate recorded in two years.
This compares to a year-on-year increase of between 4.2% and 4.3% during each quarter of 2017 and increases closer to 5% recorded during 2016.
“While in real terms this means the average rent for a three-bedroom home has gone up a couple of dollars less than it has in the past, it is a notable turning point after the peaks of 2016 and a very steady 2017,” says Director Kiri Barfoot.
She says the company performs rental reviews with its landlords at least once a year, but it is ultimately the landlord’s choice if they raise the rent and by how much.
“Despite rising operating and compliance costs, these figures indicate that landlords are choosing not to raise rents by as much as they may have in the past.
“What remains to be seen is how other pending regulatory changes may affect landlords’ costs, and how they will accommodate these.”
Ms Barfoot says that contrary to some reports, the company is not seeing a mass exodus of landlords from the market and is actively encouraging more people to invest in rental properties.
“Auckland needs more great landlords and now is a great time to purchase a rental property. While operating costs are going up, rental yields are now holding their ground in relation to house prices.”
Three-bedroom properties, which make up around 40% of Barfoot & Thompson managed properties, are used as a measure of the market, however two-bedroom properties and homes with four or more bedrooms saw similar rates of change during the quarter at 4% and 3.7% respectively.
The outlier was one-bedroom properties with an increase of 5.3% year-on-year for the quarter.
Area by area, prices for rentals of any size were most under pressure in the Central Suburbs and West Auckland, up 5.7%, and rose the least in Pakuranga and Howick, at just 2.2%.
Quarterly rental update – Average weekly rent received across Auckland
Quarter 1 (January to March) 2018 vs 2017
Table source: Barfoot & Thompson averages for managed tenancies as at end of each month in quarter. Categories with less than four tenancies are not included.
*Based on statistics from approximately 16,000 Auckland rental properties managed by Barfoot & Thompson. This includes more than 6,000 three-bedroom properties, which have been chosen as the standard example to provide insight into the ‘typical’ weekly rental price in Auckland.