Monday, May 20, 2024

Rural south and east, city centre outpace rest of rental market 

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Data shows bigger significant rental increases in the east – including Beachlands [pictured], Clevedon and Kawakaka Bay. Times photo Wayne Martin
Quarterly insights from real estate agency Barfoot & Thompson show the average weekly rent for a home in Auckland reached $642.28 at the end of June, up 3.37 per cent or $20.95 on the same time last year.

However data shows bigger significant increases in the east – including Beachlands, Clevedon and Kawakaka Bay.

General manager for property management, Samantha Arnold, says the change is in keeping with the pace of increases recorded over the previous two years, which ranged between 2.97 per cent and 3.35 per cent.

“Consistency has returned to Auckland’s rental market after the disruption caused by the pandemic in early 2020,” says Arnold.

“Alongside a return to more typical market conditions, we are also seeing a smoothing in the numbers over time as rental increases are restricted to once a year for existing tenancies.”

However, two very different parts of the city stood out in the data drawn from more than 17,000 rental properties across the region:

  • the Franklin/rural Manukau area with a 6.59 per cent rise in its average weekly rent; and
  • the city centre with a 5.86 per cent rise.

“These areas have clearly been a driving force behind this quarter’s increase,” says Arnold.

The Franklin and rural Manukau area has seen higher than typical price increases since mid-2022 and is likely in a cycle of adjusting to increasing demand.

“This is a broad area of more rural suburbs either side of the Southern Motorway including Beachlands, Clevedon and Kawakaka Bay to the east and Karaka, Pukekohe and Waiuku to the west, so there will be many factors at play,” says Arnold.

“On average, it’s the most affordable area to rent in Auckland, second only to central city apartments.

“It’s also a fast-growing area, with busy pockets of residential and commercial development attracting more people to live and work there.

“A larger proportion of new build properties could also be contributing to the rise and, at the same time, we are seeing a slight dip in the number of homes available for rent which could be putting pressure on new tenancy pricing.”

In the city centre, the apartment market only regained its strength last quarter as workers, students and tourists returned at scale following the pandemic.

“Previously this market had been down and stagnant for several years, with price changes hovering below 1 per cent until finally rebounding to 3.46 per cent at the end of March 2023,” says Arnold.

“This quarter, it’s up a further 5.86 per cent, or $30.03 on the average weekly rent.”

City centre apartments now attract an average weekly rent of around $542.16, compared to a pre-pandemic average of $520.64 in late 2019.

The low number of rental properties available in the central city was also a factor, says Arnold.

“The recent influx of workers, students and working holidaymakers to Auckland is putting increasing pressure on already historically short supply here and we anticipate this will continue for some time,” Arnold says.

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