Auckland rents rose 4.6 per cent across the board from January to March but nearly 10 per cent in the city central area, according to the city's biggest real estate agency.
Kiri Barfoot, a director of Barfoot and Thompson, which manages around 16,500 rented Auckland properties, said that last year rents only rose 3.2 per cent across all categories.
But in this year's first quarter alone, CBD rents for properties which are mainly apartments jumped 9.69 per cent and rents for two-bedroom places across the entire city are up 4.62 per cent.
"The market segments with the highest quarterly year-on-year increases include two and three-bedroom apartments in the CBD, and two-bedroom homes in other parts of the city," the agency said.
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"Quarterly data for the January to March 2018 period shows that while weekly rent increases across the city held in-line with the trend of the previous year, rising just 3.2 per cent year-on-year for the first quarter of 2019, some segments of the market began to regain ground," it said.
"While more moderate increases in weekly rents continue across the city, we are seeing pockets of the market building some momentum," Barfoot said.
Rents rose fastest in two-bedroom properties "a clear performer across the market, even when the exponential growth of high-end, two-bedroom city apartments is factored in.
"This segment of the market saw a 4.6 per cent increase in weekly rent in the first quarter of 2019, compared to the same period last year. In the final quarter of 2018 the comparative increase was 4.3 per cent, and prior to that just 4 per cent, so the figures are slowly turning the other way," Barfoot said.
She cited landlords' moves to recoup costs from owning and maintaining their places as one factor in pushing up rents.
First-quarter rental data reflects a varied scene. Graphic / Barfoot and Thompson
In January, the Herald reported how the hunt was on for properties in Auckland's already-squeezed rental market with an America's Cup challenger team appointing a local agency to snare places.
Houses, apartments and units are being sought in Westhaven, Viaduct Harbour, Princes Wharf, lower Auckland CBD, Herne Bay, St Marys Bay, Freemans Bay, Parnell, Ponsonby, Grey Lynn, Orakei, Mission Bay, Kohimarama, St Heliers, Remuera and throughout the wider region, she said.
The new Barfoot and Thompson data showed lower rent increases for larger places. For example, four-bedroom and five-bedroom rents across all areas of Auckland only rose 1.4 per cent in this year's first quarter.
The CBD saw the biggest rent rises, followed by Franklin/Manukau rural, west Auckland, the North Shore and central suburbs.
On April 4, CoreLogic senior property economist Kelvin Davidson said national rental growth was outpacing property values.
The highest rental yields can now be found outside the main centres, he said.
Simultaneously, the 10 lowest yielding suburbs were all in Auckland.
"Factor in the dip in values in these expensive parts of Auckland, total returns over the past year haven't been that flash. Meanwhile, the tax ring-fence on rental property losses will also knock the returns for some investors, although we don't anticipate that it will have a major market-wide impact," he said.
"After a long period where average property values rose more quickly than rents, and hence gross rental yields fell, the situation has been reversing a little in recent months Since the start of 2018, rents have been outpacing property values, and in the year to February 2019, the rise in national rents (5.6 per cent) wasn't far off double the increase in values (3 per cent)," he said.
- New Zealand Herald
