Auckland rents increase at highest rate in eight years

Wednesday, 31 January 2024

The Auckland region’s average weekly rent increased by 5.7% in the year to December.

Auckland rents rose by more than 5% last year, and it was the biggest increase since 2015, new Barfoot & Thompson figures reveal.

The region’s average weekly rent across the 17,500 properties on the agency’s books was $662 in December, according to its latest quarterly rental update which covers existing and new tenancies.

That was an increase of 5.7%, or about $33, on the average of $629 at the same time the year before.

Barfoot & Thompson’s general manager for property management Samantha Arnold said rents had been moving at a steady pace of 2.5% to 3% annually for several years.

But the average weekly rent shifted up a gear towards the end of last year, when it rose 4.44% annually in the September quarter, she said.

“That was the first time in five years that the average rent rose above 4% and it appears it may have marked the start of a new pricing cycle.”

The increase in the December quarter was the biggest annual increase in rents since 2015, when it neared 7%, she said. In the year to December 2015 the average rent went up by 6.62%.

Auckland CBD rents were hard-hit in the pandemic, but have recovered strongly over the last year.

Rents were up by over 3% in every part of the region, but the biggest increase was in central Auckland where they skyrocketed up 9.91% to an average of $565.

Franklin and the rural Manukau area had the second highest increase at 6.57% to an average of $586.

Rents rose least in central Auckland’s western fringe where the average was up 3.11% to $714, and the North Shore where it was up 3.90% to $697.

Arnold said one driver for the growth in rents was rising demand, which was due to the growing number of Aucklanders who were renting.

“The return of long-term visitors and international students, alongside record-high net migration, is adding significantly to the number of people seeking a rental home.”

The weather events of early 2023 were having an ongoing impact, making some homes unavailable and forcing both renters and property owners to move into new rental properties, she said.

“Supply also remains constrained, and there are too few rental properties available.

“We are seeing a slightly lower turnover as tenants seek to avoid the added costs of moving and landlords seek the security of longer-term tenancies.”

But the rebound in central Auckland rents, which came after that market was hard-hit by the pandemic, had given the overall average an added boost, she said.

Barfoot & Thompson’s figures followed the release of CoreLogic’s latest housing chart pack last week which showed rental growth was running at historically high levels.

CoreLogic senior property economist Kelvin Davidson said the national rent was up 7.0% in the year to December, according to Stats NZ new tenancy flow measure.

“That remains well above the long term average growth rate of 3.2%, and reflects further growth in wages, as well as a tightening supply and demand balance.”