Residential rents in Auckland's central business district (CBD) appear to be holding the gains made earlier this year.
The residential property market in Auckland's CBD market is mainly smaller apartments which are popular with overseas students, and are mostly owned by investors.
However rents in the CBD took a tumble as overseas student numbers declined during the Covid lockdown period (see second graph below) and vacancy rates increased.
Data from bonds collected by Tenancy Services show average rents for newly tenanted one bedroom apartments in the CBD ranged from $420 to $450 a week immediately prior to the lockdown in March 2020, while average rents for two bedroom apartments ranged from $540 to $593 over the same period.
However as the number of overseas students coming to New Zealand dried up during lockdown and many already here returned to their home countries, average rents for one bedroom apartments dropped to as low as $365 a week, with two bedroom units bottoming out at $470 a week.
According to the Ministry of Business Innovation and Employment, the number of people in NZ on student visas dropped from 84,000 in February 2020, just before the first Covid lockdown, to a low point of 31,000 at the end of last year.
However their numbers have been growing quickly again this year, pushing up rents in the process.
At the end of September 55,000 overseas students were in NZ and the average CBD rents in Auckland had climbed to $460 a week for one bedroom apartments and $593 for two bedroom units. They appear to be holding steady around those levels.
That's back to where they were pre-Covid.
The comment stream on this story is now closed.
- You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, register here (it's free) and when approved you can select any of our free email newsletters.
9 Comments
Looking at the figures, CBD apartments are the only rental investment delivering anywhere near 10% gross. But I wouldn't want to carry the risk of a hefty body corp fee to remediate a leaky building.
Or the fact you never know when the govt could secure a number of units for ‘temporary accomodation’.. some of the stories are horrific
Insurance bomb about to go off just like in Wellington. Investors need to look at net yields.
Yep - I'm aware of a block in a flood plain that has just had its premiums double
They are not going to be holding there for very long. October Customs passenger flows show a massive 47,794 net people have arrived in October, and there are still 9 days to go. This will be inflationary for everything, not just rents.
Some would say rents will be higher for longer...
touche`
Student rents in Auckland look to be 3-4x that of student rental properties in Tokyo and Osaka. Japan just announced visa for foreign students who have finished their studies and looking for work. Expats on minimum USD150k can get automatic permanent residency.
They're about 20 years too late
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.