The latest June Trade Me statistics show an emerging trend in Auckland for the growing demand of larger 5+ bedroom dwellings with the median rent being $850pw and up by 13.3%. When you compare this to the traditionally popular 3 to 4 bedrooms which only had an increased growth of 1.7% and 1 to 2 bedrooms 3.5%.
This is likely because of a move for more house sharing between families as a byproduct of housing becoming less affordable and generally taking up a higher proportion of take home pay.
An interesting link to refer to is THIS on the interest.co.nz website which shows that nationally it is taking 25% of after tax income to pay the median rent of a 3 bedroom house. In Auckland We are hearing of multiple cases through our finance arm Kris Pedersen Mortgages, where people are sharing as a means of being able to save up a deposit to be able to get into their first home. These people will generally make good tenants as they will be wanting to keep their overall profile clean for future mortgage financing.
Another shift that was evident in the Trade Me June report was rents in Auckland being up 3.9% when compared to a year ago, this is a 2% increase on the data that was released last month for the May 2106 to May 2017 period which showed at that time only growth of 1.9% for Auckland rents. Interestingly Auckland’s growth in rising rents has been extremely slow when compared to other areas like Wellington which had a year on year increase on 12.5% and Waikato an increase of 8.3%.
Again this trend is supported by what we see in our mortgage business, with investor buying behaviors having been heavily focused on areas outside of Auckland and in particular Wellington.
One interesting point to keep an eye on is the tightness of labour supply with the unemployment rate being the lowest in almost a decade and there potentially being some wage increases in the horizon (this can however be argued against because of how low inflation is). If this does eventuate we may hopefully get to see a spike in rental prices in Auckland.
Talk to us today about how we can help you stay ahead of the rental market game.