Lower rent not yet ‘affordable’
Auckland’s rental market continues to cool, new data indicates, but one advocate for tenants says rents need to fall by $100 or $200 a week to achieve real affordability.
Barfoot & Thompson, which has 16,000 rental properties on its books in Auckland, said the average rent rose 1% in the second quarter of this year, to $622.44 a week. But over the same period, general inflation was 1.7%.
Rents were up 3.27% compared to a year earlier, or almost $20 a week – about half the rate of wider inflation. South Auckland had the biggest increase, up 4.6% year-on-year.
Director Kiri Barfoot said the rent increase was consistent with recent quarters, where rent had increased about 3% year-on-year. She said there had been a period of catch-up after rents were frozen and slower to move through 2020 and early 2021.
‘‘At the same time, property owners have been working to accommodate new levels of compliance and higher operating costs, including rising interest rates and the removal of tax deductibility.
‘‘All of these have put pressure on rental pricing, although the recent increases have been quite measured compared to the 5% and 6% peaks we’ve seen in the past.’’
She said rents could ease in the months to come. She had heard of cases across the country, including in Auckland, where properties were slower to rent or had to have their rent reduced to meet the market.
‘‘This could be partly seasonal – we often see people hunker down in the winter months, but the driver is more likely to be the rising cost of living. People are grappling with very tight budgets, and property owners will be recognising the importance of a shorter vacancy and a sustainable tenancy over higher yield.’’
Geordie Rogers, a spokesperson for tenants’ advocacy group Renters United, said he had seen rents dropping at the higher end of the country’s rental market by about $10 or $20 a week.
‘‘Where people have been able to afford more previously and now have more income and have a stable rental property already they have more freedom to argue with their landlords on what price their rent should be set at.’’
But he said there had been no relief at the cheaper end. ‘‘There is still not enough housing at a low enough price to have affordable housing.’’
He said wages had not kept up with rents for the past 10 years so a large decrease of $100 to $200 a week was needed so tenants did not have to spend a third of their income on rent.
Central Auckland properties – dominated by apartments, were the cheapest in the city in the quarter at an average of $511.90 per week in June.
Trade Me earlier reported that rental listings were up nationwide by 11% in June. At the same time, the national median rent was $570 a week in June, down 1% from $575 in May, but still up 5% annually.