Fixed term tenancies surpass periodic for the first time
Fixed-term tenancy agreements have surpassed periodic (open-ended) tenancies in popularity for the first time, accounting for 51% of tenancy agreements in 2016.
“The increasing number of people living in rental properties as their home has sparked some debate about the terms and conditions of renting, particularly around security of tenure,” Barfoot & Thompson Director Kiri Barfoot says
“There hasn’t been much data presented as part of this discussion. Our last five years of data show that fixed-term tenancies are increasing in popularity thus providing security for owners and tenants. In 2012, fixed-term agreements accounted for 35% of tenancies across our Auckland portfolio. In 2016, fixed-term tenancies have increased to 51% to become more popular than periodic.”
Currently, the most common fixed-term tenancies are 6-12 months in duration, followed by 12 months +, and less than 6 months.
“In the past, when a fixed-term tenancy ended and the tenant and owner agreed to continue, ‘defaulting’ to periodic was common. Now people are opting to resign another fixed term,” Barfoot said.
Barfoot & Thompson data also shows that duration of tenure is steady. Average tenancy duration in Auckland across all areas and property types as a whole has decreased slightly from 24.8 months in October 2012 to 23.6 months in October 2016.
Tenancy types in the simplest terms are as follows:
A periodic tenancy is one that continues until either the tenant or the landlord gives written notice to end it.
A fixed-term tenancy only lasts for a set amount of time – for example, one year. The amount of time must be written on the tenancy agreement.
A short fixed-term tenancy is one that lasts for 90 days or less, and these have their own special characteristics.