Rents rise, as do landlords’ costs
Data from one of Auckland’s biggest property managers shows residential rents are rising as landlords face increasing costs.
Kiri Barfoot, a director of agency and management business Barfoot & Thompson, which manages more than 14,500 Auckland rental properties, said rents rose nearly 5 per cent throughout the city in the latest quarter, and by 6.2 per cent in the central suburbs.
“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 and the incoming Earthquake Commission levy, compliance costs for smoke alarms and insulation, and you can understand the context of rent increases,” she said.
“Many owners will be relieved at recent forecasts indicating that interest rates are likely to remain flat in the near future.”
Third-quarter figures from July to September showed the average Auckland weekly rent was up 4.7 per cent to $542, from $520 during the same period in 2016.
Central suburbs rents rose 6.2 per cent to an average of $584 a week. North Shore rents rose 4.12 per cent to an average of $592, while South Auckland rents rose 4.93 per cent to an average of $480. The average accounts for places of between one bedroom and five-plus bedrooms.
Rents for one-bedroom places rose fastest, up 6.02 per cent from $339 a week, the data showed.
Central suburbs’ one-bedroom rents rose 9 per cent, with average weekly rent increasing from $339 to $370 a week.
“Almost 60 per cent of renters plan to buy a home in the next two to five years, but we know that saving for a 20 per cent deposit and tough lending restrictions are delaying people from buying,” Barfoot said.
“In the meantime, people are taking an interim step — choosing to rent on their own in-between flatting and the traditional first-home buying stage.
“They are prepared to pay a little bit more for privacy, and are fortunate to have plenty of new developments to choose from.”
People eager to buy a home are looking to rent in the meantime and willing to pay a little more to do so.