Quarterly Rental Update: City Centre And Rural South Continue To Outpace Rest Of Market

Quarterly insights from real estate agency Barfoot & Thompson show the average weekly rent for a home in Auckland reached $642.28 at the end of June, up 3.37 percent or $20.95 on the same time last year.

General Manager for Property Management Samantha Arnold says the change is in keeping with the pace of increases recorded over the previous two years, which ranged between 2.97 and 3.35 percent.

“Consistency has returned to Auckland’s rental market after the disruption caused by the pandemic in early 2020,” says Arnold. “Alongside a return to more typical market conditions, we are also seeing a smoothing in the numbers over time as rental increases are restricted to once a year for existing tenancies.”

However, two very different parts of the city stood out in the data drawn from more than 17,000 rental properties across the region:

• the Franklin/Rural Manukau area with a 6.59 percent rise in its average weekly rent; and
• the City Centre with a 5.86 percent rise.

“These areas have clearly been a driving force behind this quarter’s increase,” says Arnold.

The Franklin and rural Manukau area has seen higher than typical price increases since mid-2022 and is likely in a cycle of adjusting to increasing demand, says Arnold.

“This is a broad area of more rural suburbs either side of the Southern Motorway including Beachlands, Clevedon and Kawakaka Bay to the East and Karaka, Pukekohe and Waiuku to the West, so there will be many factors at play.

“On average, it’s the most affordable area to rent in Auckland, second only to Central City apartments.

“It’s also a fast-growing area, with busy pockets of residential and commercial development attracting more people to live and work there.

“A larger proportion of new build properties could also be contributing to the rise, and at the same time we are seeing a slight dip in the number of homes available for rent, which could be putting pressure on new tenancy pricing.”

In the City Centre, the apartment market only regained its strength last quarter as workers, students and tourists returned at scale following the pandemic.

“Previously this market had been down and stagnant for several years, with price changes hovering below 1 percent until finally rebounding to 3.46 percent at the end of March 2023.

“This quarter, it’s up a further 5.86 percent, or $30.03 on the average weekly rent.”

City Centre apartments now attract an average weekly rent of around $542.16, compared to a pre-pandemic average of $520.64 in late 2019.

The low number of rental properties available in the Central City was also a factor, says Arnold.

“The recent influx of workers, students and working holidaymakers to Auckland is putting increasing pressure on already historically short supply here and we anticipate this will continue for some time.”

The tables above are based on statistics drawn from a portfolio of over 17,000 Auckland-based rental properties managed by Barfoot & Thompson during June 2023. This includes both existing and newly signed tenancies.

Monthly rental statistic reports are also available on the Barfoot & Thompson website under ‘Market Reports’.

© Scoop Media