The head of one of Auckland’s largest property management companies has not noticed any significant sell-off of rental homes ahead of next month’s new tenancy rules.
Kiri Barfoot, director of Barfoot and Thompson, which manages about 16,500 rental properties, told OneRoof that the number of available properties for rent remained steady.
“We’re not seeing any higher-than-average turnover of landlords. Some landlords who have been in it for a while are accelerating their retirement plans and selling now, but that’s because prices are so good and Covid has made them rethink their retirement. It’s certainly not a reaction to the new rules. Most people sell for a variety of reasons,” she said.
“There have been threats to sell by a few, some saying, ‘Oh I've had enough, I’ll do something else with the money’, but landlords come and go. There’s about a 30% chance that when a property sells it goes to another landlord, or to a first home buyer.”
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Barfoot & Thompson director Kiri Barfoot says landlords are not exiting the market in significant numbers. Photo / Supplied
According to Barfoot & Thompson figures, the average weekly rent in Auckland reached a new high of $595 at the end of 2020, up 2% on the 2019 December quarter.
“This equates to around $12 more per week, or $624 more a year. If supply and demand were equal, then rents wouldn’t go up, so interest and competition for properties is on the up,” Barfoot said.
“Rental prices have been going up for the last 20 years. Tenants with job uncertainty or reduced earnings will downsize, or perhaps have two or three generations living in a house.”
Barfoot said that demand was still greatest for three-bedroom homes, with more and more tenants seeking new builds.
“People are prepared to pay another $150 a week to get a brand-new place with insulation and heat pumps and double glazing. In a new-build, they don’t have to clean away mould.
“People don’t mind a smaller yard to be closer to amenities or their work.”
The greatest rental pressure in Auckland, she said, was in Rodney and South Auckland, where the median rents for a three-bedroom house rose between 3.2% and 3.5% in the last 12 months – representing $18 per week rises. “Demand [in these locations] is higher because rents are lower. There are definitely a few people at most viewings, but I wouldn’t say it’s sensational with queues of people.”
Barfoot expects that with the new regulations, landlords would be more careful about who they accept as tenants.
“But landlords have always had a choice. And tenants who want to do things like paint, we’d see that as a positive that they want to treat [their rental] like their own home.”
