Auckland rent rise shock
Tuesday 15 May 2018
It seems the pace of Auckland rent rises have actually slowed - that's according to a new rental market report from Barfoot & Thompson.
There's been much talk of late about sky high rental prices and the potential for their further escalation if landlord costs keep going up.
But Barfoot & Thompson's latest quarterly rental market update shows that rent increases in Auckland are easing.
According to the report, 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, which is 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 of nearly 5% that were recorded during 2016.
Barfoot & Thompson director Kiri Barfoot says that, 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.
But it is a notable turning point after the peaks of 2016 and a very steady 2017, she says.
“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.”
The report uses three-bedroom properties, which make up around 40% of the properties the agency manages, to measure the market.
However, Barfoot says that 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, which saw a rent 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, where they were up by 5.7%.
Rental prices rose the least in Pakuranga and Howick, where they went up by just 2.2%.
Barfoot adds that, contrary to some reports, they are not seeing a mass exodus of landlords from the market.
“But 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.”
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