Quarterly Auckland rental update: Growth continues
• Strong growth in the rental property market compared with this time last year
• 36% per cent increase in new apartments
• 26% increase in all new rental property types
Number of rental properties up, vacancies low
Barfoot & Thompson has seen major expansion of the rental property market across Auckland for the June to September quarter this year compared with the same quarter last year.
Commenting on the rental market, Barfoot & Thompson Director Kiri Barfoot says, “We’re seeing strong growth in new rentals – apartments in particular are up by 36%. This is a recent upward trend coinciding with new developments in the central city.
“In this last quarter alone, we had 387 new apartments, compared with 263 and 285 in the same quarters for 2014 and 2015, respectively.
“But rental supply is barely keeping pace with demand. Vacancy rates are just 1% despite 26% growth for all property types. We are turning properties around in an average of less than 4 days.
“A greater number of residential property investors are turning to professional managers to look after their investment.
They see the benefit of regular property inspections, ensuring rents are paid on time, the timely attention to maintenance and delegation of the complexities of tenant/landlord relationships.
We are finding this move to professional managers is occurring among both experienced landlords and those entering the market for the first time.”
Overall rental growth slows
This quarter there was a slight tempering of the year-on-year increase in average weekly rent. The increase between quarter three 2015 and 2016 was 2.4% ($507 vs. $519).
Greater than average rent increases were seen in Rodney, South Auckland and Franklin/Manukau/rural (4.97%, 3.79% and 3.4%, respectively). The lowest average increase was seen in the Central Suburbs at just below 2%.
The year-on-year average increase in weekly rent was approximately 5% for the previous quarter.
Steady as she goes for a three bedroom home
The average weekly rent for a three bedroom home in Auckland during the July to September quarter was $520, rising 1% on last quarter and 4.6% on the same quarter in 2015 ($497), down just slightly from the year-on-year increase reported the previous quarter (4.8% for Q2 2016 vs Q2 2015).
“Properties of all sizes showed slightly lower year-on-year increases in average weekly rent compared with the previous quarter. The largest increase continues to be for two bedroom homes,” says Ms Barfoot.
One bedroom properties averaged $339 per week (up 4.6% from $324 in the June to September quarter 2015), and two bedrooms $433 (up 5.5% from $410), while 4 bedroom homes brought in $652 (up 3.5% from $630) and 5+ bedroom homes averaged $804 (up 3.5% from $777).