Auckland Rent Increases Lag Behind Property Price Increases

November 18, 2013

Auckland Rent Increases Lag Behind Property Price Increases

The rise in Auckland property values in the past 12 months is not resulting in a similar increase in property rents.

Figures released by Barfoot & Thompson show that the average rent ‘in force’* for a three bedroom property in Auckland in September was $455 a week.

The average rent in force in May for a three bedroom home was $446 a week.

“The rise of only 2 percent in the six months will come as a surprise to many,” said Kiri Barfoot, a director of Barfoot & Thompson.

“The prevailing belief is that property investors are simply passing on higher property costs to tenants, but this is not showing up in the figures.

“Rents are increasing, but the rate of increase is lagging well behind house price rises.

“It suggests landlords are placing great store in retaining quality tenants taking a long-term view of the return they can achieve on their investment.”

The data shows that the in force rent for three bedroom homes has seen the largest increase in the six month period.

The rent for four bedroom homes has increased in the six months by 1 percent to $577, while that for 1, 2 and 5 bedrooms has increased by 1.6 percent.

The highest location in which to rent a three bedroom home is the Eastern Suburbs, where the average rent is now $541 while the least expensive location is Franklin and rural Manukau, where the average rental cost is $354.

*The average in force rental is the sum of all rentals for three bedroom homes. It is not the rent for new contracts signed in September. In September Barfoot & Thompson was managing 4452 three bedroom homes on behalf of landlords.

Barfoot & Thompson knows Auckland best. It is the city’s leading rental and property management company, managing in excess of 10,500 properties.

For further information visit www.barfoot.co.nz

ENDS

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