Quarterly Rental Update: Increasing Demand Sees Average Weekly Rent Tip Over $650

September quarter data released today shows the average weekly rent paid in Auckland has tipped over $650, with the region’s rental market recording one of its biggest increases in years.

Barfoot & Thompson, which manages more than 17,000 rental properties in Auckland alone, says the average weekly rent paid across all its tenancies was $652.19 in September, up 4.44 percent or $27.74 over the same time last year. The most notable moves in pricing were observed in new tenancies, rather than existing ones.

This follows two years of relatively steady change, ranging between 2.97 and 3.37 percent year on year, and marks the first time in five years where a percentage increase above 4 percent has been recorded.

General Manager of Property Management at Barfoot & Thompson, Samantha Arnold, says there were several factors behind the lift.

“Firstly, we are seeing the continued recovery of the City Central segment as people return to the area, coupled with constrained supply, come through in these figures.

“The city apartment market saw an 8.43 percent or $43.18 per week rise this quarter. It’s a significant shift from the almost flat line we saw through 2020, 2021 and much of 2022 and is feeding into the higher overall average.”

However, more significantly, she says the ‘gear shift’ in pricing coincides with a record-breaking period for migration into the country.

“The latest statistics show net migration began to exceed 100,000 in the second half of this year, and annual arrivals to the country reached an all-time high of 225,400 for the year ending August 2023.*

“With many migrants attracted to cities like Auckland, we believe significant demand for housing is putting pressure on available stock, and therefore pushing prices up.”

Arnold says the company had more than 2,000 properties listed during the three months ending 30 September, hosted more than 27,500 people at viewings, and processed more than 20,200 applications.

And while the company’s average weekly rent figure captured all rentals, she said the most notable moves in pricing were being observed in these new tenancies: “New tenancies are at the pointy end of where increased demand meets constrained supply.”

Across the region, on average, the highest average weekly rents were paid for large city-fringe residences and homes on the North Shore. Properties in the south of the city remained the least costly places to rent, however homes in Franklin/Rural Manukau continued to attract the second highest increase in rents after the central city, up 6.50 percent.

One-bedroom properties attracted the highest increase, up 5.91 percent, likely reflecting the resurgence in demand for Central City apartments.

*StatsNZ figures released 11 October 2023 https://www.stats.govt.nz/news/net-migration-exceeds-100000

Average weekly rent comparison over the past ten years

The tables above are based on statistics drawn from a portfolio of approximately 17,500 Auckland-based rental properties managed by Barfoot & Thompson during September 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