Quarterly rental update
30 July 2019
Recent regulatory changes yet to show in pace of rent increases
Recent regulatory changes are yet to show in the pace of Auckland rent increases according to recent pricing insights from the city’s largest property management agency Barfoot & Thompson.
The company looked at average weekly rents for nearly 16,500 properties at the end of June and found that Aucklanders are now paying around $17 more per week to rent a home than they were this time last year, which is the lowest annual rate of change recorded over the past several years.
“The proportion of year-on-year weekly rent increases across the region has lessened each quarter since at least early 2016,” explains Director Kiri Barfoot. “And it’s a marked trend that has continued this quarter, despite coinciding with a period of considerable change for the rental sector.
“Where we were seeing weekly rents go up by $23 or 4.5% year-on-year in the second quarter of 2018, this has now eased down to well under $20. This quarter is also the first time we’ve seen the rate of increase drop under 3.0%.”
Ms Barfoot says that this stood out in the wake of recent regulatory changes, continued increases in operating costs and slowing capital gains for landlords.
“So, while rents are still moving up with landlords working to recoup costs, for now they are doing so more incrementally.”
While the overall trend is true for the bulk of properties, Ms Barfoot notes there are variations across specific areas or sizes of home across Auckland, with some rising faster or slower than others.
“For example, renters in Rodney experienced an average increase of only $11 per week over the same period last year, while renters a bit further south on the North Shore have seen weekly rents go up by $19.”
CBD apartments were an outlier in the statistics with an 8.7% increase for the quarter year-on-year, or $42 more per week. “This is due primarily to the growth in higher-end and larger apartments in the central city demanding higher prices.”
Two-bedroom homes in all areas of Auckland also continued to show more price momentum than other sized properties, with a 4.2% increase compared to larger home rents which grew by just 1.2%.