The rise of bedroom diversity in Auckland's rental market

We analyse 20 years of rental data to examine changing preferences for different bedroom number properties. 

Auckland's rental market housing stock, which once was almost half made up of standard three-bedroom homes, has changed drastically over the past 20 years. 

To examine these changes, we analysed bonds lodged with the Tenancy Tribunal between 1997 and 31 March 2017, accounting for 744,216 rental transactions during the almost 20-yer period. 


Three bedroom properties waning in popularity

In the first quarter of 2017, 35% of all bonds lodged were for three-bedroom homes, compared with 46% in the same period of 1997, representing a 24% reduction in the proportion of three-bedroom homes. 

"The three-bedroom bungalow or villa we tend to picture as the standard rental is quickly waning. When we look at what is being rented, the home type, size, and number of bedrooms has changed markedly over a period of just 20 years," says Barfoot & Thompson Director Kiri Barfoot. 

Proportion of rentals by number of bedrooms graph

Rise in demand for smaller and bigger properties

In 2017, one-bedroom properties are fast rising in popularity and the number of houses with four or more bedrooms has increased by 300% since 1997 (4% vs 12%).

"Today, around one third of all tenancies are for three-bedroom homes, whereas these were close to half of Auckland's rental property market 20 years ago. Tenancies are now spread across properties with any number of bedrooms, with the biggest change being for properties with the fewest and most number of bedrooms."

Between 1997 and 2017, the proportion of one-bedroom tenancies increased by 85% (13% vs 24%), and now represent almost a quarter of all properties let within the Auckland region. 

To March 2017, the North Shore had the largest share of rental agreements for four or more bedroom homes, making up 23% of its rentals. Auckland City had the largest share of one-bedroom rental agreements at 36%. Waitakere had the least one-bedroom rentals at just 4%. 



Auckland's changing rental landscape

"Auckland's housing needs have changed. The drivers of this have been changing family structures, increasing international immigration and multiculturalism, and evolving attitudes to lifestyles and expectations among Auckland's population," says Kiri Barfoot.

"Combined with this shift in what renters need and want, the housing stock itself has been evolving. This is evident in new developments, such as The Antipodean in the CBD, with a range of different sized homes being integrated into the plans.

"Another interesting trend we noticed in the data is that it's only recently that the proportion of one-bedroom and 4+ bedroom properties being rented increased. The number of bedrooms had been fairly stable before that. Our data also shows a large increase in properties with more than four bedrooms compared with 5 years ago."

Length of tenancies increasing

The data also revealed a decline in the total number of bonds lodged across the city. Comparing the same three-month periods, 8840 bonds were lodged in 1997, compared with 6605 in 2017. 

"Fewer bonds lodged doesn't mean fewer people are renting, as a bond is only lodged with new rental agreements. In fact, the opposite is true. As Auckland's population grows, more people are renting.

"Our data shows that people are staying in rentals for longer, which means that, even with more people renting, bonds aren't being lodged as frequently. Under Barfoot & Thompson property management, the average tenancy is around two years, having increased from about 18 months over the last few years."