The average rent charged on residential rental properties managed by Barfoot & Thompson increased by $20 a week (3.3%) in the 12 months to September.
Barfoot & Thompson is the largest real estate agency in the Auckland region and manages about 16,500 rental properties on behalf of landlords.
The average rent on the properties it manages increased to $626 a week in September this year from $606 a week in September last year. The rate of increase was up very slightly from a year earlier, when the average rent across the Auckland region increased by 3.0% over the 12 months to September 2021.
There were significant variations in the rate of rent increases across the region, with the Central Auckland district recording no change over the year to September 2022, which followed a 0.9% decline in average rent over the previous 12 months.
The biggest annual increase of 6.5% was in Franklin/rural Manukau on the region's southern flank. See the table below for the full breakdown by district and number of bedrooms.
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Average Rents Charged for Residential Rental Properties Managed by Barfoot & Thompson
September 2022
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123 Comments
Increased rent = higher wage demands = higher inflation = higher interest rates, until the day the straw renders the Camel useless. We're all noticing how much power, food is increasing in real time too. Inflation is not coming down anytime soon.
The many negative geared Landlords will struggle to pass on the increased interest costs that are coming. They will have to share the pain of capital loss together with being stuck with a commodity that's no longer popular. I hear they're called "Reluctant Landlords"
Is this just let rentals, or are they including the advertised prices for their 645 empty rentals (as per trademe)?
And is the yoy % increase calculated from the overall area average (which is affected by change in composition), or the average increase per-dwelling-type-per-area (which would give a more accurate view)?
From a Landlords perspective, is your balance sheet healthier than your communication skills? Again, you find yourself being reminded that past returns are not a reliable indicator of future returns. If you regard yourself as a seasoned investor, its not a good look to put such a deficiency on public display😜
I refused to pay more rent when the Landlord asked last month. Hawkes Bay has not gone up at all according to the latest numbers. The landlord is greedy and charging too much as it is, and I will NOT pay for his investment mistake. He obviously has not listened to The Prophet either, so I feel no remorse. He has agreed to keep the rent the same, wise move on his behalf, although I will move when rents come down. I sleep very well knowing Interest Rates are going to 10% Next Year, because it does not effect me, actually rents will go down with the crash. Off to buy some more popcorn, Extra Butter !
I understand that you're twisting what I said (or you don't understand it). Re-read my original post, I said house owner or investor, because both these types of people are likely to know what it is to have a mortgage.
So no, I did NOT say "only landlords are qualified to give advice on mortgages"
Sure it does. Just like how I've owned a few cars for the last 15 years so I am now a qualified mechanic. I've lived in houses for the last 30 odd years that have had appliances powered by electricity, so I'm now a qualified to give advice on all things electrical. I'm actually in the process of helping re-write Building Code Clause G9 due to my vast experience.
Having had a mortgage doesn't give you more of an incite future interest and house prices than anyone else. All it gives you is a bias. I would say having an economics degree doesn't even give you much of an edge its all just guesswork.
All statements here are opinions, even by economists nobody actually knows what will happen.
How do you know he has no experience in interest rate movements and housing markets?
He could be a qualified financial advisor or a developer or work for a development company or be a market analyst... All of these people could also be renters.
You are literally doubling down on your arrogance
Only landlords can understand the complexities of interest rates huh Yvil?
These are your words, not mine. I don't know what you do for work day in day out, but I bet you're a lot better at it than I am. Would you not find it arrogant if I gave you advice daily, non stop about a subject I have not personal experience in?
Please reply.
Ok I see what's happening here.
You are confusing having "done" dozens of mortgages over the last 25 years with being an expert on interest rate movements. That's like eating loads of burgers and assuming you know how to run a successful burger joint.
I believe you have experience in successfully making money in property investment over the last 25 years but I would say that it has been a pretty easy environment to do so. If what we're experiencing is a fundamental change in the world economy and a lot of the indicators appear to show that it is then the investment strategy that worked before may not work again. If this is not a fundamental change and things are going to be the same as they have been for the last 25 years then yes, I agree people should listen to your advice on how to make money as you are obviously successful at this.
But if this is a fundamental change then your experience probably makes you less qualified than others to provide advice. When people have had success with a particular strategy they find it harder to reassess and do something different if circumstances change. The more confident they are in their strategy, the more difficult it is for them to change tack.
I might be a renter that has money in term deposits or a business owner in a capital heavy industry that requires loans/finance. Interest rates don’t solely affect property owners. The way you talk (and it’s not only you, don’t feel picked on), it’s like housing/property is the only thing in the economy that is moved by interest rates..
Hi Yvil. I have only now got back from my popcorn trip, it always takes time to find the Extra Butter. Actually Yvil you do not know my background, not one bit, you just went off on your tangent . I have really touched a nerve going by all your insecure comments. If you had listened to The Prophet about 7% Interest Rates This Year, Guaranteed, you would NOT be panicking. But your arrogance kept you in Denial ! If you are panicking now then just wait for next year. You will be moving back to MiserYvil.
"I'm currently holidaying in my villa in Bali. Don't worry about me, I can assure you I'm much happier in my position than in yours."
But you don't know my position Yvil. So how can you assure that ? Im renting and your leveraged to the hilt, its easy to see in your stressed out comments. My Landlord is taking the fall, not me. The smart investor knows whats coming and is positioning himself for that. Maybe there is some tress in front of your holiday home in Bali that need to be chopped down. Pick up an easy Million, throw that towards those mortgages. Although that new 7% rate may just bring you back to square one again.
Must be in the name. Landlord is such a pretentious title, which society should seek to abolish the use of. If the owner of a shop/other service provider openly had the same attitude towards their clients as "Landlords" tend to do, they'd go out of business.
I guess when your business model has 20 years of fair weather sailing, with generous lending conditions from the banks, combined with capturing finite supply of existing affordable housing (they stopped making 20+ year old entry level homes 20+ years ago) that would normally be sold to FHB, then it's easy to lose perspective.
Not really sure why you have this attitude - my properties are in Napier and rents continue to increase because I increase mine annually, and just did on two in Tamatea - no grumbles by the tenants. One tenant has asked to re-fix for another 2 years as they don’t want to go back to the renting rat race.
Be careful or you might end up homeless.
Do you not understand that this is a jerk comment to make?
In the last 2 weeks there have been 2 articles published on this site all about housing unaffordability... and they have clearly set out the numbers. The fact is that MANY people cannot afford a house, through no fault of their own.
Only in NZ do we have so many jerks that are so quick to rub housing unaffordability in people's noses.
Owning a house does not make you a better person. Or a smarter person. In many (most?) cases it just means that you are a luckier person.
People like you, and comments like yours, make me SO KEEN for this coming crash. So many arrogant people are going to get a big fat faceful of humble pie.
Let the ponzi burn. 🍿 I hope that you, and the jerk that was bragging about all his rentals above, lose a ton of money. Too much arrogance. Too much hubris.
Yes it's an insensitive comment, just like some of mine. And why do you think we reply like this? Did you ever wonder? Can you not see it's because the original post is equally insensitive?. "Future" said "He obviously has not listened to The Prophet" which is another of his multipole accounts, he also repeatedly rejoices in the misery of others, THAT'S WHAT CREATES INSENSITIVE REPLIES.
Just like your own comment above and the many similar ones you have made before, like:
"we have so many jerks "
"SO KEEN for this coming crash. So many arrogant people are going to get a big fat faceful of humble pie."
It's that kind of angry posts that is the cause of equally insensitive replies
Hence why I asked my question[s]. In our area, 6 months ago there were no properties > 4 bedrooms. Now there are several 5-6+ available. That skews the average up - though all the shoe boxes coming online skews it down also, hence why I asked how the yearly change was calculated.
Admittedly, we're only in one little microcosm of Auckland, but nearly every large property had it's price reduced before being let while I was watching (the one exception being the one we took, since we were unwilling to risk a great house in a great neighbourhood on the gamble of cheaper rent - also school zoning didn't give us too many options).
Good questions. Would be interesting to dig deeper. All the shoe boxes coming on line would have both rental lowering and increasing impacts, but I assume the overall net effect will be lowering. Firstly by increasing the number of two bedroom properties for rent over the past year, relative to 3 bedrooms. And secondly through more supply being delivered, affecting supply / demand forces. The secondary rental increasing effect will be that new 2 bedroom shoeboxes will be on average a higher rent than old brick and tile flats etc.
I sold my rental property in response to the government changing the rules on rental property interest deductibility. basically it was a fools game to be in a business where the government can change your cost structure and render the business umprofitable.
to put it in perspective, I had owned the property for 9 years, had a mortgage of just 290k remaining. the loss of interest deductibility would have seen me paying an additional 5k a year in taxes despite the rent only covering interest plus rates plus insurance. to maintain my break even status i needed to raise my rents by approx $195 per week and that was pre the rate rising cycle.
net result. got out at the peak of the market, paid off all my debt, added -1 rental property to the national pool.
Rents of 1 bedrooms have increased the least, so probably a combination of what you said, plus 1 bedrooms being less desirable if you're working from home. Central Auckland would have the majority of 1 bedroom units. But also why settle for a 1 bedroom when there are now more larger options available?
These are average rents, doesn't take into account change in composition.
Like for like, my impression is that rents are falling on the Shore. Probably because people are moving from central in smaller property to larger property closer to beaches. Previously the trade-off of travel costs (including time) and high rents made no sense but they can trade up for a much smaller premium to what they were paying before and travel costs are lower due to AT subsidy and working from home some days of the week.
So it's entirely possible that people are paying more but for a better property, and that the property is renting for less than it used to be.
If the $20 rent increase from $606 to $626 causes the tenant to move on to somewhere better and cheaper. Just one week of vacancy will need 30 weeks of rent to recoup the $600 you lost.
It is in Barfoot's interest to ratchet up rent every year as they get a 8.5% clip on every dollar of rent.
More and more dwellings coming on line for a still stagnant population to live in. Wait for the 1 weeks free rent deals from landlords that are smarter than average.
Some landlords are willing to take the risk of vacancy. A good percentage of tenants will stay even if the increases are gigantic. I have witnessed other landlords do this. I personally can't be bothered having an empty property and re advertising so keep the rents low.
Thought of the day: Retired Stroppy is like a peak hour bus, he will be along soon
Yes I did my spreadsheet this morning. Numbers are up slightly from one month ago which I read as basically equilibrium. Even if what you say is true that "rental supply is very rapid" then rents still rising a modest 3.x% has to be a very concerning thing for the informed renter. Did you read my post correctly, however, I said that I said that I like to keep rents low. How about your motel charges. Ps the gray clouds are hanging over your place
There is a rental listing increase in Auckland of 1.5 percent over the last month. BUT a decrease of 19.9 percent over the last 5 months.
Are you sure you have the right end of the stick Yvil ? You probably don't have any numbers to go on, it is more your "gut feelings" after a corporate luncheon at the motel.
For me the Sun has always shone. My main earner was a 4.27% (paid monthly) with Rabobank, matures in Jan-2023. My next rate will have a 5 in front of it or maybe even a 6!. I missed the worst of the deposit rate slump. This time around I will only lock it in for a year as there are many opportunities outside of term deposits coming soon.
Anyway Zach, I'm pretty sure you already knew this so poor attempt at a troll buddy.
by Retired-Poppy | 19th Mar 18, 2:10pm "in January I took out a TD @ 4.27% with interest paid monthly which I reinvest - Rabobank. Since then, rates have dropped slightly" And boy did they drop!
Despite what my username implies, I'm a 57 year old full time worker. I tried the early early retirement thing and didn't like it. I should change my username as it might stop HW2 thinking he can abuse me because he assumes I'm elderly 😆 And no, I didn't return to work cause I needed the money either🤑
I enjoy doing what I do.
This thread is probably dead now but what I meant by "time in the sun" was being a vocal advocate of term deposits. You must admit you went very quiet during the period of super low interest rates and seemed to wake when that changed. I wasn't really trolling. For a while back then your shtick wasn't very fashionable.
Savvy investors like myself hold rental properties but have no debt. We are fully cashed to the maximum possible in term deposits and waiting for the discounts (in many markets) next year. My rental is a hassle to maintain but it is still printing cash at around 3% yield and with a 200% tax free capital gain.
I know of someone thats been forewarned rent will go up 16% March next year ...and im picking its likely mortgage rate hikes are behind it . This is why regulators need to be careful how hard they punch with rate hikes. Theres a fine line between taming inflation and creating inflation... trickle down versus a monsoon.... good thing for the tenant is plenty of warning and listings are increasing...the 16% rise is not as heavy as it seems, brings rent up to market values really...tenants not riled, they go where the value is and have had a very good run with the property ... they are very good tenants... bad news for the landlord is the tenant has a solid history of finding value in good locations and has never skipped a beat or failed an inspection....will be interesting to see if the tenant decides to sit or split....lol
Having a property manager is heaps easier than dealing with the tenant yourself and they charge the tenant a lot more than what you would. The higher rent usually covers their fees plus a bit. Its definitely a good way to go. Although I like getting to know the tenants, so there is for and against. The properties we self manage I charge much lower than market rent but I have my reasons for that.
There are ways of course of combatting rent increases but you need to get consent in many cases..If you have a spare bedroom you can use it to offset any increase. Another factor that comes into play with higher interest rates is if you have decent TD returns its hard to see the landlord outpacing you. Yes you are going to take a hit but it wont hit as hard as folk that have nominal savings suffer. The other alternative is up your work hours to offset the adjustment or seek a higher income. My opinion is OCR rate hikes may not be the inflation killer many tout particularly if you hike agressively/ excessively... its not rocket science...push up mortgage or financial costs / offset onto tenants/consumers / offset onto employers/manufacturers.. end result inflation. Begs the question is the comedy all about retaining/increasing YOY for lenders rather than axing inflation? Some of the recent bank results may affirm the former.
Does anyone have any links to stats on the % of people holding mortgages when the OCR has hiked in the past? Granted the current climate is unprecedented with the wage increases and external factors combating the OCR hikes, It would be an interesting comparison to gauge the power or effectiveness f the OCR today vs in the past. If there are on average less people with mortgages, it could be argued that the impact the OCR has on spending is somewhat muted. Also factoring in the DTI of the time would bring some good comparisons.
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