Following more than a year of slower-paced rent rises, the start of 2019 has seen a bounce in weekly rent increases in some parts of the Auckland market.
The market segments with the highest quarterly year-on-year increases include two and three-bedroom apartments in the CBD and two-bedroom homes in other parts of the city.
Barfoot & Thompson’s quarterly data for the January to March 2018 period shows that while weekly rent increases across the city held in-line with the trend of the previous year, rising just 3.2% year-on-year for the first quarter of 2019, some segments of the market began to regain ground.
“While more moderate increases in weekly rents continue across the city, we are seeing pockets of the market building some momentum,” explains Barfoot & Thompson Director, Kiri Barfoot.
She notes two-bedroom properties as a clear performer across the market, even when the exponential growth of high-end two-bedroom city apartments is factored in.
“This segment of the market saw a 4.6% increase in weekly rent in the first quarter of 2019, compared to the same period last year. In the final quarter of 2018, the comparative increase was 4.3%, and prior to that just 4.0%, so the figures are slowly turning the other way.”
Ms. Barfoot says one and three-bedroom properties saw small lifts in their quarterly year-on-year increases also, while price growth remained flat for four and five-bedroom homes.
“Indeed, weekly rents for larger properties rose just 1.46% this quarter, and in some areas of the city prices actually retreated for four and five-bedroom properties.”
The biggest gains by area were seen in Central Auckland, where high-end two and three-bedroom apartments continue to drive up average weekly rents.
“For example, we’ve seen a 9.7% increase for CBD rentals between the first quarters of 2018 and 2019. A three-bedroom apartment now costs an average of $1,092 per week to rent – almost double the average for a home of a similar size elsewhere in Auckland.”
There were also slight gains in the Eastern suburbs, Rodney and Pakuranga/Howick areas, while the South, West and North of the city experienced a slowing in price rises.
“This may be more reflective of the demand cycles that all areas go through, as we’ve previously seen very strong weekly rent growth in South and West Auckland in particular over recent years.”
She says the factors behind the movements were varied, but it may reflect the need some landlords have to recoup the increasing costs of owning and maintaining their rental property.
Table source: Barfoot & Thompson averages for managed tenancies as at the end of each month in the 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.