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Quarterly Rental Update: Auckland Rental Market Finishes Year With Record Rise, City Centre Rebounds

Data from Barfoot & Thompson shows Auckland’s average weekly rent reached $662.23 in December 2023, up 5.27% on December 2022’s average of $629.09.

The statistics are drawn from rents paid across nearly 17,500 Auckland properties managed by the agency, including both existing and new tenancies.

Barfoot & Thompson’s General Manager for Property Management Samantha Arnold says the figure marks the highest year-on-year increase in average weekly rents recorded by the company since 2015, when it neared 7%.

“After several years of relatively slow and steady movement, of around 2.5% to 3% year-on-year, the average weekly rent shifted up a gear last quarter, when it rose 4.44% for September year-on-year.

“That was the first time in five years that the average rent rose above 4% and it appears it may have marked the start of a new pricing cycle.”

She says many factors are feeding into both rising demand and constrained supply, which is driving prices up.

“More and more Aucklanders are renting, and the recent return of long-term visitors and international students to New Zealand, alongside record-high net migration, are now adding significantly to the number of people seeking a rental home.”

Even the weather events in early 2023 were having an ongoing impact, she says, making some homes unavailable and forcing both renters and property owners to move into new rental properties.

“Supply also remains constrained. There are too few rental properties available and we are seeing a slightly lower turnover as tenants seek to avoid the added costs of moving and landlords seek the security of longer-term tenancies.”

City centre rebounds

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Also at play in the overall figure was a rebound in rents in Central Auckland’s CBD apartment market.

“While rental prices were on the rise by more than 3% in all areas, the Central Auckland figures have given the overall average an added boost,” says Ms Arnold.

CBD apartments recorded the greatest increase in weekly rents in December 2023, with the average up 9.91% year-on-year.

This means a one-bedroom apartment in the City’s centre cost nearly $40 more per week, and a two-bedroom apartment over $56 more per week, than in December 2022.

“Like many cities around the world, Auckland’s CBD apartment market was hard hit by the pandemic, but as the country’s largest city with two big universities at its centre, it has also been poised for a strong recovery once the border opened, and visitors and students returned.

“After some tentative steps in late 2022 and steady growth throughout 2023, it has more than regained that lost ground, and December’s average weekly rent of $565.65 surpassed Central Auckland’s pre-Pandemic peak of around $521.”

Looking elsewhere across the city, the second highest increase in average weekly rents was recorded in the Franklin and Rural Manukau area, up 6.57%.

Rents rose the least in Central Auckland’s Western fringe, capturing suburbs like Grey Lynn, Point Chevalier, Ponsonby and Waterview, up 3.11%, followed by the North Shore at 3.90%.

By size, one-bedroom properties saw the highest increase in average weekly rent by 6.41%, likely driven by the rebound in the CBD apartment market, an area where Barfoot & Thompson has twice as many one-bedroom rental properties on its books than any other area of Auckland.

Three-bedroom properties and properties with five or more bedrooms rose in price slightly slower, up 4.67% and 4.93% respectively.

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