Auckland's largest real estate agency has reported an early spring spike in rental property activity.
Barfoot & Thompson, which manages more than 13,000 residential rental properties in the Auckland region, says online applications from tenants for rental properties were up 28% in August compared to July, while online rental property searches were up 26% for the month.
Rental activity is usually quieter over the winter months, then picks up in spring and peaks over summer.
However, the traditional spring surge in rental activity has started earlier this year, the company said.
"This signals an early start to the 'shifting season,' when tenants begin to look elsewhere for properties that might better suit their needs," said Kiri Barfoot, who heads Barfoot & Thompson's property management services.
"It's a typical spring trend but we are seeing it take hold earlier each year as people try and get in ahead of the crowds.
"It's likely activity will also peak earlier this year, prior to, rather than after the Christmas holidays,"
Having just come through the winter months, finding a home that was warm and dry was high on the list of priorities for many prospective tenants.
"Homes with insulation and efficient heating are highly sought after and we encourage our landlords to upgrade their properties in this way," Barfoot said.
However, while demand for rental properties was up, rents remained steady.
The average weekly rent being charged on properties managed by Barfoot & Thompson was $496 in August, up just 1% compared to July and up 6% compared to August last year, suggesting landlords are continuing to accept low rental yields on their properties.
"This indicates that landlords are not pushing to recover the full current purchase price, presenting Auckland renters with reasonable value for money," Barfoot said.
7 Comments
"This indicates that landlords are not pushing to recover the full current purchase price, presenting Auckland renters with reasonable value for money"
Lol. Go on landlords, extract a full 6% gross yield from your properties, go on try it! Keep publishing the good news stories B&T....it couldn't be a speculative bubble could it?
I've been watching these large houses on the North Shore $1000+ per week languish on the market month after month. I may be entirely ignorant here but would it not be better to get some return by dropping the price to around the $800-900 mark (where they would be snapped up), this would also give the landlord the opportunity to choose the best possible tenant, long term, etc. Instead they just sit there (great hulking lumps) not making anything at all and costing the landlord a small fortune. Most of these properties appear to be recently purchased by absentee owners (offshore - long term rentals) so perhaps they have so much cash they don't particularly care either way, so one has to wonder why they purchased the house in the first place? But even if I was rolling it in I would rather have some money coming in from my investments than nothing at all? Maybe I am missing something here?
Tenants often remove more value from a property than you get from them in rent. Also if you buy a property with the "intent to rent it out" and then sell it after 3 years of it sitting empty ( appreciating in value ) you can reasonably be said to be an investor who is trying to move an unprofitable investment rather than a speculator especially if the whole time the property has been "advertised for rent".
There is a house 3 doors down from us that has been empty for 3 years. Owned by very rich Singaporeans who were offered $2k per week and turned it down, only wanting $2.4k or over. It is beautiful but run down as empty for so long so worth less than $2k I reckon. What a waste....
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