Quarterly rental update

Our Q4 figures (October to December 2017) released today show the average weekly rent for a three-bedroom home* in Auckland was $547, up 4.3% since the same period in 2016 and 0.9% over the previous quarter.

“In recent years we’ve seen quarterly year-on-year increases closer to 5%, even 6%, compared to increases of between 4.2% and 4.3% during 2017,” said Barfoot & Thompson Director Kiri Barfoot.

“For a typical three-bedroom home in Auckland, a 4.3% increase represents a rise in weekly rent of around $23 since last year, or around $1,200 more per year.”

Rising costs of being a landlord

Ms Barfoot says such increases are due primarily to the need for property owners to continue to keep pace with the mounting costs and risks of being an Auckland landlord.

“A good rental property is one that is compliant, well-resourced and well-maintained, and the cost to landlords to provide this is growing, often beyond what is able to be recouped through regular rent increases.

“For many property owners, their recent annual outlay on maintenance, insulation and smoke alarms, higher insurance premiums, higher rates and so on, will have outstripped the increased rental income.”

Ms Barfoot said that, balanced against low interest rate projections, she anticipates the current trend in weekly rent prices to continue in 2018 and possibly edge back towards 5% due to cost and supply pressure.

Demand for one-bedroom rental properties continues

One-bedroom properties in Howick and Pakuranga experienced the highest quarterly year-on-year increase of any segmentation at 8.7%, now costing an average of $343 per week. At other end of the scale however, a five-bedroom home in the same area costs around $2 less this quarter than a year ago at $765 per week.

Ms Barfoot said while rental prices across suburbs were often cyclical, experiencing a period of growth and then levelling off, one-bedroom properties were maintaining strong rental price growth across most of the city.

“While the average weekly rent for Auckland properties with two or more bedrooms were largely in step with a 4.4% increase or less, one-bedroom properties continued to buck the trend, rising 6.2% in quarter four compared to 2016. This follows similar strong growth in quarter three.”

The areas of Central Auckland, the Central suburbs, Eastern Auckland, Howick and Pakuranga, and West Auckland all showed higher than average growth in weekly rents for one-bedroom properties of between 5.5% and 8.7%.

Meanwhile, suburbs experiencing higher than average rental increases included the ever-popular Central Suburbs as well as Rodney and West Auckland. 

“The Central Suburbs are convenient and popular and therefore draw higher prices. There are also more new, high-spec properties on offer at the top end of the rental market. West Auckland and Rodney are areas that are on the up and attracting more residents with improved amenities.”