Rates rises biggest rent driver
A third of landlords think rents are too low, Crockers latest market research shows.
Wednesday, August 6th 2014, 12:00AM
by The Landlord
The company asked property investors whether they thought rents were fairly priced, as part of its latest Crockers Property Investment Index.
Half said they thought rents were fairly priced. But 32% said they were below a fair price and 4% said they were well below a fair price. Another 6% said they were above a fair price.
Because of concerns about overcrowding in some parts of the country, the property investors were also asked how willing they were to have extra people in their rental properties, assuming they were able to charge a higher rate because of it. Two-thirds were not open to the idea at all. Another third said they would consider it.
Half of those surveyed were not planning to increase the rent they charged in the next six months. Most of the 24% who were planning a rent increase were expecting to raise rent by only 3% to 4%.
The survey respondents said an increase in local rates was the biggest driver of rent increases, followed by increases in the cost of insurance, interest rates and then property maintenance. Only 16% would increase rents to improve their income.
Crockers said two-bedroom rent prices in Auckland were stable but the average price of a three-bedroom rental increased compared to the month before.
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