Quarterly rental update

Barfoot & Thompson Property Management's Q3 figures (July to September 2017) show the average weekly rent for a property in Auckland has risen by 4.7% to $542, from $520 during the same period in 2016.

Costs and risks of owning a rental are increasing

Director Kiri Barfoot says increasing costs for landlords and the increased risk of owning a rental property in 2017 are both major contributions to rent increases.

“Across Auckland, rent has increased by a little under 5% in the last year. We are just coming out of winter, which is a maintenance-heavy period for rental properties. Add to that uncertainty around rates increases, increased insurance costs due to the fire service levy, the incoming Earthquake Commission levy, compliance costs for smoke alarms and insulation, and you can understand the context of rental increases.”

“Many owners will be relieved at recent forecasts indicating that interest rates are likely to remain flat in the near future.”

Demand strongest in Central Suburbs

Average weekly rent in the Central Suburbs increased the most of any area, rising by 6.2% from $550 in Q3 2016 to $584 in Q3 2017.

“Demand for rentals in Ponsonby, Grey Lynn, Mt Eden, all the old Auckland City suburbs west of the Southern Motorway, is strong. The area boasts short commutes into the city, and the properties often have outdoor space, parking, and are closing to shopping, dining and entertainment areas.

Commenting on the relationship between Auckland residential sales and the rental market, Ms Barfoot says, “I wouldn’t expect rent to flatten out as house prices in Auckland have. Just as Auckland rents didn’t increase at double-digit rates along with house prices last year, or the year before.”