Barfoot & Thompson cites the factors behind the surge
The average weekly rent in Auckland has exceeded $650, marking one of the region’s most significant rental market surges in years, September quarter data from Barfoot & Thompson showed.
The Auckland-based real estate company, which oversees a portfolio of more than 17,000 rental properties in the city alone, reported that the average weekly rent for all its tenancies reached $652.19 in September, up 4.44% or $27.74 more compared to the same period last year. The surge was more prominent in new tenancies than existing ones.
This is the first time in five years that a percentage increase above 4% has been recorded, with the previous two years showing relatively stable changes ranging between 2.97% and 3.37% year-on-year.
In a media release, Samantha Arnold (pictured above), general manager of property management at Barfoot & Thompson, said there were several factors behind the increase.
“Firstly, we are seeing the continued recovery of the City Central segment as people return to the area, coupled with constrained supply, come through in these figures,” Arnold said. “The city apartment market saw an 8.43% or $43.18 per week rise this quarter. It’s a significant shift from the almost flat line we saw through 2020, 2021 and much of 2022 and is feeding into the higher overall average.”
More notably, this “gear shift” in pricing aligns with a record-breaking influx of migrants into the country.
“The latest statistics show net migration began to exceed 100,000 in the second half of this year, and annual arrivals to the country reached an all-time high of 225,400 for the year ending August 2023,” Arnold said. “With many migrants attracted to cities like Auckland, we believe significant demand for housing is putting pressure on available stock, and therefore pushing prices up.”
Arnold said the company listed more than 2,000 properties during the three months ending on Sept. 30, hosted viewings for more than 27,500 people, and processed more than 20,200 applications.
And while the firm's average weekly rent figure covered all rentals, she noted that the most significant changes in pricing were being witnessed in new tenancies.
“New tenancies are at the pointy end of where increased demand meets constrained supply,” Arnold said.
Across the region, the highest average weekly rents were typically found in large city-fringe residences and North Shore homes. In contrast, properties in the southern part of the city remained the most affordable to rent. However, homes in Franklin/Rural Manukau saw the second-highest increase in rents after the central city, rising by 6.5%.
One-bedroom properties posted the biggest increase, rising by 5.91%, which is likely due to increased demand for apartments in the Central City, Barfoot & Thompson reported.
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