One bedroom averages over $300 anywhere in Auckland

February 14, 2017

One bedroom averages over $300 anywhere in Auckland

Quarterly Auckland rental update

• Rent increased by 4.4% in Q4 2016 compared with Q4 2015, with average weekly rent for a three-bedroom home now $525
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• For the first time the average rent for a one bedroom property in all areas of Auckland has passed $300
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• 9% year on year increase in rental properties being managed by Barfoot & Thompson, with strongest growth in Franklin, Rodney, and Central Auckland
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Rents slow to rise

Average Auckland rent has risen at a relatively reasonable pace despite high demand for rentals, rising property sales prices, and long-term interest rates tipped to go up.

Based on the latest data from Barfoot & Thompson Auckland’s largest property management company, Auckland renters paid around 4.4% more on average in the October to December quarter (Q4) of 2016, compared with the same quarter the year before. Average weekly rent across all property types and locations in Auckland was $524, up from $502 in Q4 2015.

Average rent rose more in South Auckland (6.3%), and slightly less in Central Auckland, Franklin/Manukau, and Pakuranga/Howick (2.6%, 3.1% and 3.3%, respectively).

“Rents have risen at quite a modest rate given the record house sales prices we saw last year. Most property owners would prefer a trustworthy long-term tenant, paying rent on time, to asking for higher rent,” says Barfoot & Thompson Director Kiri Barfoot.

“Landlords obviously consider the return on investment, but are very conscious an empty property doesn’t pay rent. This is why we don’t tend to see tenants being hit with large rent increases even when house prices or interest rates rise.”

Regular rent review is an important part of professional property management service.

“Rent is determined by property location, size, and number of bedrooms, as well as taking into desirable features such as internal garaging and sunny outdoor spaces,” says Ms Barfoot.

One bedroom averages over $300 anywhere in Auckland

“In the past year, the largest rent increases in terms of property size were for one and two bedroom homes. For the first time the average rent for a one bedroom property in all areas of Auckland passed $300, ranging from $302 in Manukau/Franklin to $373 in Central Auckland.

“However, three bedroom homes are the most common rental and the best reflection of what the overall market is doing,” says Ms Barfoot.

The average weekly rent for a three bedroom home in Auckland during the October to December quarter was $525, rising less than 1% on last quarter ($520) and 4.4% on the same quarter in 2015 ($503). Rent for a three bedroom home ranges from an average weekly rent of $419 in Franklin/Manukau to $887 in Central Auckland.

One bedroom properties averaged $344 per week (up 5.1% from $327 in the October to December quarter 2015), and two bedrooms $437 (up 5.1% from $416), while 4 bedroom homes brought in $658 (up 3.4% from $636) and 5+ bedroom homes averaged $812 (up 3.2% from $787).

Demand for rental property management up

Property owners are turning to professional property managers in droves to mind their most valuable assets. Barfoot & Thompson was managing nine percent more rental properties at the end of the 2016 than in 2015.

Based on data from October to December 2016, Barfoot was managing between 12 and 16 percent more properties in Franklin, Rodney, Central Auckland, and South Auckland, than in the same quarter the year before.

“Typically we sign on around 450 new properties every month. There are two clear trends, the first is a desire for professional management in areas further north and south as rental demand increases beyond the traditional city limits; the second is owners coming to us as developments are being completed in the central city,” says Ms Barfoot.

Ends

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