The average rent on residential rental properties managed by Auckland's largest real estate agency increased by $17.10 a week last year.
Barfoot & Thompson manages more than 16,000 residential rental properties across the Auckland region on behalf of landlords and their average rent increased from $592.79 a week at the end of 2020 to $609.89 at the end of 2021, up $17.10 (+2.89%) for the year.
The average rent for one bedroom properties was $396.42 a week, up 3.13% for the year, while three bedroom properties finished the year on $615.65, up 3.33%.
The cheapest place for families to rent a two or three bedroom home was Franklin/rural Manukau on the city's southern fringe, where the rent on the average two bedroom property ended last year $417.29 while three bedroom homes were $502.79.
Auckland's central suburbs were the most expensive with a three bedroom home there renting for an average of $869.51 a week.
The table below gives the end of year averages broken down by district and the number of bedrooms.
However while last year's 2.89% increase was up on the previous two years, (+1.81% in 2020 and +2.58% in 2019), it was still relatively low in historic terms.
Between 2012 and 2018 the average rent on properties managed by Barfoot & Thompson increased by between 3.05% and 6.73% a year.
The peak of 6.73% was in 2015 when the average rent increased by $31.73 a week (see second table below).
"The year-on-year price changes we track across our portfolio puts 2021 in the third lowest position for the rate of rent increases, compared to the movements we've seen over the past 10 years," Barfoot & Thompson Director Kiri Barfoot said.
"Only 2020's 1.81% rise - unique in having a six month freeze on rents during New Zealand's first lockdown, and 2019's 2.58% rise, were lower," she said.
The comment stream on this story is now closed.
Average rents for rental properties managed by Barfoot & Thompson - December 2021
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78 Comments
Is this actually a decrease in real terms given the high inflation rate?
Ask someone paying the rent if this an increase or decrease.
Rich don't care.
Social revolution is the only answer. I guess most people had enough of capitalism.
Reserve bank, commercial banks and govt are to blame for fhb not getting a home. Rents are up less than House Prices. That doesnt matter because its the last straw
To be honest I pay rent and it hasnt gone up since I moved in (18 months). Meanwhile my pay has, so I guess, in real terms it has decreased for me.
Let’s hope landlords use their ill-gotten gains to improve the quality of their rental properties.
Too many tenants are paying exorbitant rent to live in slum dwellings - especially in the inner-city suburbs of Wellington and Auckland.
TTP
Yes it is, that is a matter of fact. But to others points, we should only ever consider the renters, landlords who have put their own money into the house they allow other people to live in who cannot afford a house are apparently not real people, do not matter and their loss is good. Pitiful.
Landlords made an investment/speculative decision with all the risk that that entails (and have done very well for themselves thankyouverymuch). On the other hand renters need to live somewhere...
Your average punter is anti-landlord up until the point they are transferred, or relocate, for work/study and then they demand high quality rental accomodation close to their employer/cbd at an affordable price. Like posters here moaning about immigration and constantly threatening to emigrate to Australia, the irony is lost on them.
Irony is becoming more of mystery every day society wants to simplify and polarise everything, is it ironic that irony is not missed?
I guess the key difference is that 'your average punter' used to be able to afford that for themselves.
Yes they have done well for the risk they took. Renters who cannot afford a house will have to rent, some of them are housed in government housing, some live with relatives not sure what your point is as everyone has to live somewhere?
My point is that no one cares about the loss of rental income for landlords, which given the current market situation is exactly as it should be.
Well the landlords care lol! People are people James, we are all the same value surely, or are you telling me some are more equal than others?
It's the same logic as worrying about food affordability rather than congratulating supermarket owners. Those on the receiving end of the increases tend to be more in need, more precarious, and more like to take real 'eating or heating' type decisions. Meanwhile any sensibly setup Landlord is not at risk of going hungry because the rent rise didn't come in like they planned. Where do you think the compassion should be directed?
So you are saying that due to their better personal circumstances, landlords should not be shown compassion. Ok.
There is nothing here, despite your digging, for the renter. Any way you look at it they are paying less in real terms than they should relating to the purchasing price of the dollar. The landlord has lost rental in real dollar terms. I think your mincing about compassion is misdirected or at best naive.
Landlords have been shown the bulk of the compassion over the last two years with a massive dose of Reserve Bank and government welfare. Surely that's enough compassion. Renters have suffered the loss of that wealth that was transferred.
I disagree RIck, the renter may have had other investments that benefited from Covid monetary stimulus, stocks etc.
The missing piece of the puzzle has always been the favourable tax treatment of housing investment and the leverage. But landlords still provide a service that society needs. Fix the tax treatment, don't get rid of landlords.
I disagree RIck, the renter may have had other investments that benefited from Covid monetary stimulus,
And plenty may not. Savings for deposits have been devalued so would be FHB were hard hit by the wealth transfer. Given the lack of leverage compared to housing, they're also relatively less rewarded even if they did hold shares.
Absolutely agree with you that we need to fix the tax treatment. It's obviously out of balance having productive work pay for society while people speculating on land are carried.
There is a financial lesson here though Rick, if you have all your assets in bank deposits you are highly exposed. Not owning a house and being cashed up and not in risk assets is a very conservative position and not appropriate to most people - they just don't know it. Not taught at school so most learn the hard way.
That is not compassion "sympathetic pity and concern for the sufferings or misfortunes of others." perhaps you mean advantaged? Renters have not "suffered" any loss of wealth as presumably they had no wealth to lose and so it cannot be possible for it to have been "transferred".
In actual fact, the value of assets has been inflated and the relative value of wages and savings reduced. This is a transfer of wealth, as has been quite well discussed in columns and comments here and elsewhere.
Alternatively, you'd have to believe the Reserve Bank can actually create new wealth out of nothing, not just shift it around. In which case, all is solved because we now have a magical money tree.
It is not a transfer of wealth at all and not close to a fact.
The value of assets has indeed been inflated due to their relative scarcity comparative to the demand for those assets. Demand has increased due to the reduced cost of credit meaning people can effectively leverage their wages to greater effect.
There is no "transfer of wealth" lol but I agree there has been a significant reduction in the volume and value of money caused by easy credit which has effected the buying power of wages.
Agreed. Other things being equal, the wealth of renters and savers have fallen further behind asset holders, essentially by govt/central bank policy. It's a permanent loss to them - the purchasing power has been stolen and those who stole it don't have to pay it back.
You have picked a strange battle here. What do you mean 'less than they should'? You mean 'less than they were recently'?
This is the world of investment - nothing is guaranteed. A whole bunch of my portfolio stopped or delayed dividend payments in 2020 because of Covid, did I deserve compassion? No - it didn't affect my lifestyle or stop me from living a good life. My rental property gave me a cash loss last year because work needed doing - no-one should feel sorry for me, it's just something that happens when you have an investment. Your hypothetical landlord needs to toughen up or sell up.
The point being made here was that the renters needed compassion. That is silly because in real dollar terms they are paying less for the same rental premise so are making on the situation. My point is not that anyone in particular needed compassion because I agree business in not emotional but if there to be some it would have to be for the losing party.
Actually with wages decreasing in real dollar terms they are paying more of their income and often most of their income is not disposable so they will have to suffer negative health consequences for rental increases. The market may increase and rents may increase to match the market but very rarely do rents match the actual annual management costs. Asset values and market rates increase but these very rarely match wage increases or inflation. In fact we have clear proof they do not. So in real dollar terms they are literally paying more for the same rental premise so are losing and suffering worse health outcomes. Most landlords do not keep up with necessary maintenance, not even the government. So it becomes a double health cost whammy. You can literally tell which homes are rentals because the exterior maintenance is so bad it becomes a health risk in NZ and the tenants are denied the ability to make adequate small changes to the rental to improve their health.
They should be shown compassion e.g. if they contracted covid or some other personal circumstance unrelated to their wildly successful invesment. They should NOT be shown compassion because their rental income decreased very slightly (in real terms) from an already high amount, when just last year they made 25% p.a. in untaxed capital gains. Seriously what planet are you on.
See above, MFD asked where compassion should be shown in regards to this rental situation. I am on the planet where data and truth exist, you should visit.
These are rookie numbers ... and totally at odds with the narrative of every internet slumlord out there charging "below market rates" and having tenants that were so grateful that the rent increase was only 30% this year.
https://thedailyblog.co.nz/wp-content/uploads/2021/01/EPzXeeDXUAAX1li-1…
Data is not always beautiful, nor is the truth. It is hard to understand how some of the commentators here fail to recognise the truth when it is in black and white. Perhaps it is because data is rarely referenced in the "news" these days and they don't understand what they are seeing?
Be quick!
These are averages. My landlord has been good enough not to increase my rent in 5+ years.
That is generous as their costs will have gone up, you must be a stella tenant.
Their interest costs would have gone down markedly over that time, thanks to the RBNZ.
NZ number one.
Now that a growing number of aspiring FHBs can't buy due to credit tightening and potential interest rate risks, the pressure on limited accommodation supply will rise.
The accumulative effects will see a surge in rental prices for the coming quarters- he who can pay gets to stay.
Accompanied by the Labour's approach to locking down the country on every viral event, the demand for rentals gets another boost.
Landlords with strong cash flows should consider seizing the opportunity to expand their portfolio and FHBs on marginal borrowing capacity or holding pre-approvals should act soon as opportunity costs is continuing on an upward trajectory.
Be quick!
the pressure on limited accommodation supply will rise
Limited? By whom? Also, where do you think current FHB-candidates live?
he who can pay gets to stay
LOL do you really think landlords will en masse leave their rental properties empty for months if they can't get a $50 weekly rent increase? If you're that kind of landlord then you should go back to primary school and learn some basic math.
Accompanied by the Labour's approach to locking down the country on every viral event, the demand for rentals gets another boost
Why would a lockdown cause extra demand for rentals???????????????
Landlords with strong cash flows should consider seizing the opportunity to expand their portfolio and FHBs on marginal borrowing capacity or holding pre-approvals should act soon as opportunity costs is continuing on an upward trajectory.
An excellent idea when the entire world is predicting sharp interest rate rises...
You really know how to make me laugh Jester!
Here's the reply to your long list of questions,
Q: Limited? By whom? Also, where do you think current FHB-candidates live?
R: You've answered part of the question yourself. Aspiring FHBs are stuck with us, they have 3 options,
- Accept the rent increase
- Approach MSD for emergency housing
- Find somewhere "free" to sleep
Q: Do you really think landlords will en masse leave their rental properties empty for months if they can't get a $50 weekly rent increase?
R: One has to be deluded to think that there's an oversupply of houses just because he comes across a few empty properties. Empty properties are there for a myriad of reasons including land banking, awaiting re-development, renovation and owners stuck overseas.
Q: Why would a lockdown cause extra demand for rentals?
R: A lock down means you can't go around the country caravan-ing your way out of reducing rents- you still have to pay the park for a spot. It also means you can't go around pitching a tent in the park or sleep in a car along the road. Most likely, social work will have you relocated into their accommodation and build the shortage pressure. Then there are 'work from homes' where their income is directly dependent on the infrastructures the houses they live in provide- unless they quit their jobs. All these will have a roll on effects on the rental market as a whole.
Just to share a joke back with you, I'd recently written to a tenant to increase his rent by $65 and he happily obliged- wise decision!
Plot twist: The dumb tenant was TTP. 🤡🤡
1. You forgot a few other options: no rent increase, or renting one of the thousands of new builds that are being finished, or moving further from main centres (WFH is quickly becoming the norm in some industries), or moving to Aus.
2. One has to be deluded to think that there's a shortage of houses. Have you looked at the number of new builds in the past 2 years vs immigration numbers?
3. So how many of these caravaneers do you think there are in the country? It's bold of you to assume that this would be a factor at all. As for the WFH crew, you mean broadband I guess... How many properties in the major cities don't have broadband nowadays? Sounds like you're inventing BS reasons to prove your point.
Your tenant is one out of 2 million in this country. I've been paying the same rent for the past 2 years and will be paying the same this year as well. There, my anecdote counters yours.
Anyways, you're entitled to your opinion. I guess you must be buying new rentals as we speak. Remember, BE QUICK!
CJ 'believe it or not' if you buy a house you can actually REDUCE your payments over time rather than hope someone takes pity on you and gives you a deal.
I would ignore the troll.
Infantile comment imo hm... putting your fingers in your ears and making nahnah sounds does not change anything.
Why? Feeding a troll is plain silly so ignoring it is the way.
Is that so... so none of you people make troll, extreme, incoherent, outrageous, play the man and exaggerated comments. What if others make factual comments and it is not something that suits your narrative, the pile on starts. Trump would be proud.
A growing number of FHBs who couldn't buy because landlords were tax-privileged vs FHB's wage savings, and because we've rewarded asset speculation more than hard work too.
Plenty of room for upward movement in rental listings!
BE QUICK!
In the UK propective tenant are offering up to 25% over asking and a years rent up front to secure rental accomodation, such is the shortage. NZ have brought in some of the anti-landlord policies that are coming home to roost over there.
https://www.telegraph.co.uk/property/uk/landlords-have-power-now-london…
The big difference is that the UK might actually have a shortage...
They do have high immigration, they opened the door to Hong Kong residents for example. Make no mistake, our borders will soon be open for immigration just like Australia.
https://www.afr.com/politics/australia-needs-explosive-surge-of-2-milli…
There will potentially be 125k arriving shortly as phase 2 of the governments immediate and current immigration plan.
Source?
https://www.emigrationnewzealand.com/new-2021-resident-visa-announced
"The 2021 Resident Visa provides a residency pathway for up to 165,000 migrants, including more than 5,000 health and aged care workers, about 9,000 primary industry workers, and more than 800 teachers.
The 2021 Resident visa will be open for applications in two phases, with the first group of people able to apply from 1 December 2021.
From 1 December 2021 you can apply if:
- You have already applied for residence under the Skilled Migrant and Residence from Work categories before 29 September 2021, or
- You have submitted a Skilled Migrant Category Expression of Interest, and have included your dependent child in the Expression of Interest aged 17 years or older on 29 September 2021."
Phase one is for those already here and in a fast-track process, phase 2 is more open to both those here and abroad.
17,706 places available to rent in London today...
https://www.rightmove.co.uk/property-to-rent/find.html?locationIdentifi…
Average rents are pretty much the same as they were in 2019.
Did you read the article? Many thousands of Rightmove will be dual agency listings, or places that have rented already/had deposits taken. There are suburbs of london with ony a handful of houses to rent. Also, London rents are above pre-covid.
I did read the article. It was mostly a collection of ancedotes from doom and gloom merchants with the typical cherry-picking you expect from real estate puff pieces. It pays not to take everything you read in the Torygraph at face value.
My rightmove filter preferences already excluded those already rented.
The article states that: "These soaring figures mean that the collapse in rents at the start of the pandemic have been reversed, with prices now 3pc higher than at the beginning of 2020." Yes. Three whole percent.
I searched the suburbs the article mentioned. Plenty of places available.
No doubt that London accomodation is experiencing some increased pressure after covid. But that article is over the top.
The comments below were full of stories corroborating the article. You are relying on an aggregator that is seriously flawed in that agents carry listings that are out of date to make it look like they have stock.
https://www.standard.co.uk/homesandproperty/renting/renting-london-pric…
It's best to avoid reading internet comments. They only make you dumber.
It will be interesting to see where it goes, incomes are up in London, and rents only 3pc so far.
There are always going to be suburbs that can be cherry picked to write stories about.
To some degree there may be some of that occurring. It is difficult to prove or disprove.
It is a very big market for sure there will always be extremes. Rents are likely to be slow to rise due to the long terms of the tenancy agreements.
As for internet comments making you dumber...;)
Reading them doesn't do anywhere near as much damage as writing them does.
Odd here in NZ, how when investors hit a small regional town suddenly prices go up, people in the area struggle to afford to buy a house, more are driven to rent thus rents rise, and more locals fall out the bottom...
Almost as if investors weren't a help to that small town. Despite their assurances that they are only there to help the situation and are horribly mistreated by such things as safety standards. Seems like a smidgen of victim mentality in some landlords lamenting "anti-landlord" policies.
"Without landlords those poor souls would have no roof over their heads!"
Yes of course, the big bad investors come marching into town and the local yokels are compelled to sell at gunpoint.
Our population is growing. New people need to live somewhere. A lot of immigrants are not able to buy their own home. Investors build houses and buy houses for people to live in. This is a net positive.
There are no anti-landlord polices in my view, health and safety is very important and these are just recognising progression in societies expectations. that the costs for those works will be passed on to the renters is of course part of the impact of those decisions, in return for a warm, safe home they will pay more.
Developers build houses and we should incentivise them.
We've incentivised speculation on housing for decades now and it has not helped home ownership affordability or rental affordability. We actually need to start applying reasonable taxation and balance out the load for funding society across productive working folk and asset speculators more appropriately.
We could actually help both with LVT on the unimproved value of land and a reduction of company income tax. Reward the creators of housing, reward efficient use of land, and alleviate problems of avoidance and evasion.
Those are all good points, however I think LVT on unimproved land will have unintended consequences and certainly get you some Utu.
Lowering company tax is a good leveler, and I think some starter packs for new business would be also good; how to frank dividends etc helpful little tricks to ensure maximum profitability.
I would be interested to hear what unintended consequences you might imagine.
I read a good analysis recently highlighting the complete lack of support for the idea that LVT is passed on to renters (for example) and in fact showing this was not the case in a good real life test in Europe.
Lowering company tax is not enough unless you also encourage money out of land speculation, otherwise we'll continue to lag.
Yes, all those people who go on about how landlords are providing a service to those who can't afford a house neglect to mention that there are large numbers of people who can't afford a house and therefore require that service only because there are so many people that want to be landlords. If you outbid a first home buyer on a house and then offer to rent it back to them, you are providing a service - but a service they wouldn't need in the first place if you weren't in the picture, and they would be orders of magnitude better off if they had been able to provide the same 'service' to themselves by being an owner occupier.
What's worse is the cards are stacked against them. I.e. A First Home Buyer forgoes expenses and saves for their deposit, an investor will often leverage equity for a "no money down" deposit. Voila, an income stream out of nowhere.
New Mantra in Landlord, give it through winz or housing NZ or any other agencies and get 20% to 35% more rent.
Motels are where it's at, motels are goldmines at the moment due to the desperation for emergency housing.
I wonder if there are any slum motel owners Anchored in these forums.
Sipping a Martini by the pool in Thailand in their "digital nomad" hemp shirt and trousers.
I'm putting up rents by the amount my taxes are increasing this year. Still at market. User pays. Grant Robertson can take a jump.
HM what is your inspired reaction
Last night I went to the supermarket, and with the Omicron getting more prominent, there was a frenzy of toilet paper buying. I consider myself smart and an entrepreneur chap so I bought 20 packs of 24 rolls , which were the last twenty of the supermarket. I went outside and I started selling them by the roll to people who came to the supermarket too late to get packs. I obviously sold them for ten times the price (law of supply and demand), anyway it was their fault for coming so late to the supermarket (probably eating an extra smashed avo). I went home in the knowledge that I'm doing something great for society and all these people who may not have got toilet paper can clean their bum tonight. Tomorrow I will need to put the price up because of the toilet tax which is damaging decent business like mine.
The missing part of the story is that the toilet paper only comes in singles. And the size of the toilet paper section is strictly limited at less than 1% off the supermarket, so as not to encroach on the milk and (productive) produce sections.
Funny story but sadly the real story has so many facets it is not funny. Decades of ineptitude and agendas culminating in the 2020 and 2021 debacles.
Our Average increase that we set on the Shore is around 10 percent last year. Having huge numbers apply for each listing at the new levels these stats seem bazaar and very low.
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