Tenants are staying put steadily putting pressure on the rental market. Photo / Michael Craig
Tenants are staying put steadily putting pressure on the rental market. Photo / Michael Craig
Pressure on Auckland's rental market has been steadily building with vacancy rates for managed properties at a recordlow.
New data from Barfoot and Thompson reveals only 1-2 per cent of the 14,000 properties the company manages in Auckland are not tenanted.
Company director Kiri Barfoot said the number of available rentals was "extremely low" and that the length of tenancy had increased by about six months.
"Our data also shows that people are staying in rentals for longer," Barfoot said.
"Under Barfoot & Thompson property management, the average tenancy is around two years, having increased from about 18 months over the last few years."
But Barfoot said despite the huge jumps in house values rent prices had remained reasonable.
Auckland property values have finally slowed but still average $1,045,059. Values according to QV were static at 0.0 per cent in the past three months but up 7.2 per cent in the past year and 91.2 per cent since the 2007 peak.
In comparison the highest rent increase in the past year was seen in the price for a three bedroom home in the city centre. To rent a three bedroom home in the city cost an extra $36 a week and reached $922 this month from $886 in June 2016.
Other increases were seen in areas with improved transport links such as Onehunga - up $28 a week to $585 in June this year from $557 in June 2016.
Median rent for a three bedroom home in New Lynn rose $34 a week up to $488 in June from $454 in June 2016.
Barfoot said long term tenants were less likely to experience rent rises. Most of the increases were seen by those taking new tenancies because landlords valued long term renters.
"Average Auckland rent has risen at a relatively reasonable pace despite high demand for rentals, property sales prices rising steeply over a number of years, and uncertainty about interest rates," Barfoot said.
"However, the average rent for new tenancies is increasing at a faster rate than the overall average."
Alistair Helm at Trade Me said even a $30 a week increase in rent was significant.
"That is $1500 a year that someone on a limited income has to find," he said.
"The reality is most renters are not in the upper or even median salary bracket and wages have not kept pace with the cost of housing."
Helm said improved transport links made previously isolated suburbs more popular and drove rents up in those areas.
"Places that were not that appealing and therefore cheaper to rent are all of a sudden more popular," he said.
