Last month, the first in the second quarter, average weekly rents rose 2.8% year-on-year.
In the first quarter the average weekly rent increased by 2.3% on the same time last year, reaching $599, Barfoot & Thompson’s latest research shows.
For three-bedroom homes, which make up the majority of Auckland’s rental stock, the average rent reached $603 per week in March 2021 – $19 or 3.3% more than in March 2020.
Director Kiri Barfoot says the figures are yet to reflect the impact of recently announced changes to the bright-line test or interest cost deductions for residential rental property income.
“The expectations for the coming months are less clear as the market navigates through these changes.”
She says that while the company does not anticipate any significant shifts due to the extended bright-line test, limiting deductions on interest expenses will ultimately put further pressure on property owners’ operational costs.
“The relatively measured pace of change across the market as a whole over the past two years, which has sat well under the previous trend of 3-5% rises year-on-year, indicates many landlords are taking a long-term approach to recouping rising costs,” Barfoot says.
“However, we may well see unintended consequences on rents and stock as landlord’s grapple with the practical reality of incorporating these latest regulatory changes into their balance sheet.”
Averages by property size and location
Properties with five or more bedrooms remained static with less than 1% movement and weekly rents just $8 more per week than the same time last year.
The region with the highest rate of increase was Rodney, up 4.3% or $25 more per week, likely mirroring the same upward pressure being seen in the local residential sales market.
In contrast, central city apartment averages continued to experience the brunt of the impact from the pandemic.
Reductions here were most notable in the weekly rent cost of two and three-bedroom apartments compared to March 2020.