Rents rise, as do land­lords’ costs

The New Zealand Herald - - BUSINESS - Anne Gibson prop­erty edi­tor anne.gibson@nzher­ald.co.nz

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.”

Pic­ture / file

Peo­ple ea­ger to buy a home are look­ing to rent in the mean­time and will­ing to pay a lit­tle more to do so.

Kiri Bar­foot

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