Quarterly Rental Update: Annual rent increases in Auckland continue, but among lowest in a decade

Quarterly Rental Update: Annual rent increases in Auckland continue, but among lowest in a decade

The average weekly rent for a home in Auckland was $609.89 in December 2021, finishing the year 2.89 per cent above December 2020’s average of $592.79.

While the end-of-year figures show the continued upward trend in rents across the city, and are nudging another milestone of $610 per week, they also place 2021’s rental price movements among the lowest in a decade.

“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 ten years,” explains Barfoot & Thompson Director Kiri Barfoot.

“Only 2020’s 1.81 per cent rise – unique in having a six-month freeze on rents during New Zealand’s first lockdown, and 2019’s 2.58 per cent rise, were lower.”

The height of movement was between December 2014 and 2015 when, off the back of constrained supply and significant growth in house prices, the average Auckland rent rose 6.73 per cent, or more than $31 per week, on the year before.

“In contrast, the average Auckland home currently costs around $17 more per week than it did a year ago.”

Ms Barfoot notes the bumpy period of lockdowns, rent freezes and changes in demand – such as in the central city, meant many factors were at play in the last couple of years’ of data.

“Rental price rises are now more likely driven by increases in the cost of operating a rental property than property values, while other factors, such as increased supply through new builds in Auckland, help to balance that dynamic.”

She noted a small ‘catchup’ from 2020’s freeze on rents may also be having an impact on the numbers.

Looking ahead, the impact of tightened lending on the first home buyer and investor markets, the lack of tax deductibility for landlords, increases in interest costs and rising inflation are likely to show in the coming months.

Regionally, properties in the south and west of the city continued to see the highest rate of increase at 4.72 and 4.19 per cent respectively, while 4-bedroom homes rose the most across property sizes, up 3.33 per cent.

ENDS