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Auckland rents rose by 3.37% in the year to June, and in some of the more traditionally affordable areas they were up by over 5%, Barfoot & Thompson says.
The average weekly rent across the 17,000 properties on its books was $642.28 in June, according to the real estate agency’s latest quarterly rental update.
That was $20.95 more than the regional average of $622.44 at the same time last year.
But the rate of rent increases has picked up, with the most recent rise the biggest since December 2017.
In the years to March and to December rents were up 3.24% and 3.29% respectively, and the December increase was the biggest in five years.
In the year to December 2017 Auckland rents rose by 4.42%, and annual increases were higher again in the years preceding that.
The biggest was in the year to December 2015 when the average Auckland rent climbed by 6.62%.
Barfoot & Thompson general manager for property management Samantha Arnold said the change was in keeping with the pace of increases recorded over the previous two years.
STUFF/Stuff
Rents are rising in Auckland, but there is more consistency in the market, Barfoot & Thompson says.
After the disruption caused by the pandemic in early 2020, the market had returned to more typical conditions, she said.
“We are also seeing a smoothing in the numbers over time as rental increases are restricted to once a year for existing tenancies.”
But rents rose by much more than the average in two very different parts of the region, and were clearly the driving force behind the broader increase, she said.
The biggest increase was in Franklin and rural Manukau where the average weekly rent was up 6.59% to $562.55.
Arnold said it was one of the most affordable areas to rent in the region, but had seen higher than typical price increases since mid-2022.
It was likely in a cycle of adjusting to increasing demand, as it was a fast-growing area, with busy pockets of residential and commercial development attracting more people to live and work there, she said.
“A larger proportion of new build properties could also be contributing to the rise, and we are seeing a slight dip in the number of homes available for rent, which could be putting pressure on new tenancy pricing.”
Rent in the Auckland CBD, which is dominated by apartments, also rose strongly, up 5.86% to $542.16 a week.
That segment of the market was hit hardest by Covid lockdowns and border closures.
Arnold said it had started to turn around earlier this year as workers, students and tourists returned at scale following the pandemic.
Supplied
Auckland CBD rents declined during the pandemic, but they have picked up again this year.
“Previously this market had been down and stagnant for several years, with price changes hovering below 1%t until finally rebounding to 3.46% at the end of March.”
The low number of rental properties available in the Auckland CBD was a factor in the rising rents, she said.
“The recent influx of workers, students and working holidaymakers to Auckland is putting increasing pressure on already historically short supply, and we anticipate this will continue for some time.”
The area still had the cheapest rents in the region, but they were now above the pre-pandemic average of $520.64 in late 2019.
East Auckland had the most expensive rents in the region, with a weekly average of $712.55.
In Rodney, west Auckland, south Auckland and Pakuranga/Howick rents rose by between 3.18% and 4.64%.
But increases were more moderate in North Shore, central Auckland west and east and east Auckland, and ranged from 0.07% to 2.10%.
The average weekly rent for a typical three-bedroom home, which makes up the bulk of the rental stock, was $647.97, an annual increase of 3.53%.
Rents were on the rise nationally, with Trade Me’s latest figures showing the median rent being asked for in listings nationwide hit a record high of $620 a week in June.
Stats NZ’s latest Rental Price Index had the amount households paid in rent for new tenancies up 3.5% annually in June.
BNZ chief economist Mike Jones recently said the pace of rent increases has picked up, and that was likely to continue, particularly in places where supply was stretched.
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