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Quarterly Rental Update: Auckland Rental Prices Move Slowly Towards A New Year

Auckland has experienced the slowest rate of rent increases in years, according to quarterly data from Barfoot & Thompson which manages more than 16,500 rental properties in the region.

“Rent increases trended down for most property sizes and areas throughout 2018, and this persisted in the final months of the year with the lowest rates of change yet,” says Barfoot & Thompson Director Kiri Barfoot.

The average weekly rent for a typical Auckland rental property* rose by just 3.1% year-on-year during the fourth quarter of 2018.

“In comparison, the same measurement hovered above 4% throughout 2017. We started 2018 at 3.9% and the increases progressively stepped down each quarter from there.”

Ms Barfoot says that in real terms, this means a three-bedroom home in Auckland cost $564 a week in December 2018, around $17 more than it did in December 2017.

“This slower, more steady rate of change is good news for renters, particularly when compared to the increases of $24 or more that we’ve seen in recent years.” 

She says what remains to be seen is how the market will accommodate the regulatory changes bedding in now, such as the removal of letting fees, as well as potential future changes to come from the Residential Tenancies Act review.

“While rents are still going up, it is unlikely the current rates of increase are keeping pace with landlords’ rising operating and compliance costs, nor are we seeing the same level of capital gains which were appeasing many landlord’s calculations. We would expect that, eventually, something will have to give.”

Looking across all property sizes and areas, the average rate of increase in weekly rents was also at its lowest at 3.3%, moving up just $4 since last quarter’s Auckland-wide average which is now sitting at $563.

Only two-bedroom properties out-performed the norm, increasing by 4.3% across all areas, while five-bedroom homes fell to 1.5% in the fourth quarter.

In the Eastern suburbs and West Auckland, average prices for five-bedroom propertied decreased, indicating a softening in demand or potential oversupply for this sized property.

The average cost of renting in Central Auckland rose the most of any suburb during the quarter, due mainly to the number of large, luxury apartments pulling in higher weekly rents.

 

Average weekly rent received across Auckland

Quarter 4 (October to December) 2018 vs same period 2017

No Bedrooms

% change Q4 2017 v Q4 2018

1

2

3

4

5+

Total

Central Auckland

$409

$582

$1,108

 

 

$507

7.24%

Central Suburbs

$380

$506

$643

$812

$1,051

$611

3.44%

Eastern Suburbs

$385

$518

$674

$905

$1,081

$653

3.19%

Franklin/Manukau Rural

$312

$371

$451

$562

$650

$475

4.45%

North Shore

$401

$484

$600

$743

$906

$620

3.83%

Pakuranga/Howick

$346

$458

$562

$680

$804

$596

2.91%

Rodney

$355

$442

$539

$664

$811

$559

2.20%

South Auckland

$310

$414

$502

$604

$728

$502

3.86%

West Auckland

$330

$431

$517

$624

$751

$520

3.57%

Auckland

$372

$475

$564

$698

$860

$567

3.28%

% change Q217 v Q218

1.91%

4.34%

3.12%

1.70%

1.47%

3.28%

Table source: Barfoot & Thompson averages for managed tenancies as at end of each month in quarter. Categories with less than four tenancies are not included.

 

*Based on statistics from approximately 16,500 Auckland rental properties managed by Barfoot & Thompson. This includes more than 6,700 three-bedroom properties, which have been chosen as the standard example to provide the best insight into the ‘typical’ weekly rental price in Auckland.

 

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