Quarterly rental report
Our latest data insights show that the pace of rent rises are easing. Read on for our quarterly rental update for Q1.
Slowing rent rises
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, 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 closer to 5% recorded during 2016.
While 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, it is a notable turning point after the peaks of 2016 and a very steady 2017, says Director Kiri Barfoot.
Increases in future remain to be seen
She says the company performs rental reviews with its landlords at least once a year, but it is ultimately the landlord’s choice if they raise the rent and by how much.
“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.”
More landlords needed
Contrary to some reports, Barfoot & Thompson is not seeing a mass exodus of landlords from the market and is actively encouraging more people to invest in rental properties.
“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.”
Changes in property size preferences
Three-bedroom properties, which make up around 40% of Barfoot & Thompson managed properties, are used as a measure of the market, however 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 with an 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, up 5.7%, and rose the least in Pakuranga and Howick, at just 2.2%.
