Average rents in Auckland increased by 4.2% to 4.3% last year compared to 5% or 6% in previous years, leaving some landlords out of pocket

Average rents in Auckland increased by 4.2% to 4.3% last year compared to 5% or 6% in previous years, leaving some landlords out of pocket

Auckland housing rents increased at a slower pace last year than in previous years, according to the region's largest real estate agency.

Barfoot & Thompson, which manages about 14,500 residential rental properties in Auckland, says the average weekly rent for the three bedroom homes it manages in the city was $547 in the fourth quarter of last year, up 0.9% compared to the third quarter and up 4.3% compared to the fourth quarter of 2016.

Barfoot & Thompson director Kiri Barfoot says that's a relatively low rate of increase compared to previous years.

"In recent years we've seen quarterly year-on-year increases closer to 5%, even 6%," she said.

That compared to increases 4.2% to 4.3% throughout 2017, and for a typical three bedroom house it would equate to a rise of around $23 a week in rent.

"For many property owners, their recent annual outlay on maintenance, insulation, smoke alarms, higher insurance premiums, higher [council] rates and so on, will have outstripped the increased rental income," Kiri Barfoot said.

The biggest rent increases for properties managed by Barfoots was for one bedroom properties in Howick and Pakuranga, with average rents that were up 8.7% in the fourth quarter compared to 12 months previously.

Conversely, five bedroom properties in the same areas were $2 a week cheaper than a year ago.

"While the average weekly rent for Auckland properties with two or more bedrooms was largely in step with a 4.4% increase or less, one bedroom properties continued to buck the trend, rising 6.2% in the quarter compared to 2016. This follows similar strong growth in quarter three," Kiri Barfoot said.

Softer property prices in Auckland had seen rental yields rise, and that could see landlords once again making investment decisions based on fundamentals such as cash flow and rental returns, rather than chasing capital gains.

"Many landlords top-up their mortgages every week and are happy to do so when capital gains are as healthy as they have been over the last five or so years," Kiri Barfoot said.

"However as property values rise more modestly, many will need to improve yield by increasing rental income," she said.

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Love the headline that says landlords maybe out of pocket because rents didn't increase by even more. Haha already increasing twice the inflation rate. The professional landlord treats it as a business to offer a good product for a fair price to someone trustworthy. That's what we try and do anyway and we find that's successful.

that's the very reason I disdain landlords as they are roaches of society (and then there are a small percentage who are 'processional landlords')

Professional Landlords are indeed a rare breed. I believe they do exist outside the lust for quick capital gains. Many speculators dare to call themselves professional Landlords that provide an essential public service. The cheek of it!

Be indignant all you want HO so what. There are tens of thousands of multi-unit, single-title properties that can only be owned by landlords. Blame the government for setting that system up and encouraging that. The properties cannot be bought by owner occupiers, how sad.

Landlords are not out of pocket, believe me! Another unresearched piece of junk journalism. I have had my rentals for 12 years now and will continue to have them for the next 30 yrs and then they go to my kids. I know what has to be done to keep the rentals in good shape, and thats what I intend to do. Many of my colleagues are of the same mind.

Yep this is a bit of a joke, landlords are creaming it and if they end up selling the house for a big profit, the number of rentals declines and then the rental price will increase sharply because tenants are not prepared to take on a mortgage, which at the current interest rates is similar to the rent. Its hard to change the mindset of people, there will always be those that rent and those that buy. Personally I would love to know which group has the higher IQ.

A question. If a landlord sells their house - who buys it? If it's an owner occupier moving house - who buys this house? Where do first home buyers come from if not from the pool of renters.