Barfoot & Thompson report that that rent increases in New Zealand are not keeping pace with property price increases, which surprised analysts. Most experts assumed that property investors would pass on rising costs to renters, but that doesn’t appear to be happening as rents increased only 2% over the last five months while property prices have taken flight across the country. Current rents in New Zealand for three-bedroom homes range from $358 to $542 per week depending on location. For more on this continue reading the following article from Property Wire.
In New Zealand property rent increases are lagging behind property prices over the last 12 months, new data shows.
The latest figures released by Barfoot & Thompson show that the average rent in force for a three bedroom property in Auckland in September was $455 a week, only marginally higher than the $446 a week recorded in May 2013.
The rental rise of only 2% over the five months will come as a surprise to many, according to Kiri Barfoot, a director of Barfoot & Thompson.
‘The prevailing belief is that property investors are simply passing on higher property costs to tenants, but this is not showing up in the figures. Rents are increasing, but the rate of increase is lagging well behind house price rises,’ she explained.
‘It suggests landlords are placing great store in retaining quality tenants taking a long-term view of the return they can achieve on their investment,’ she added.
The data shows that the in force rent for three bedroom homes has seen the largest increase in the five month period. The rent for four bedroom homes has increased in the five months by 1% to $577, while that for one, two and five bedrooms has increased by 1.6%.
The priciest location in which to rent a three bedroom home is the Eastern Suburbs, where the average rent in September was $542 while the least expensive location is Franklin and rural Manukau, where the average rent in September was $358.
The average in force rental is the sum of all rentals for three bedroom homes. It is not the rent for new contracts signed in September.
The data also shows that in September, Barfoot & Thompson was managing 4,452 three bedroom homes on behalf of landlords.
This article was republished with permission from Property Wire.