Petrol price increases outstrip rents
Auckland’s average weekly rent has increased less than the price of petrol over the past five years, and increased only marginally more than a glass of beer or a visit to the doctor.
Friday, February 20th 2015, 12:00AM
by The Landlord
“The average weekly rent in Auckland in 2014 was $488, compared with $388 in 2009, which is an increase of 26%,” said Kiri Barfoot, a director of Barfoot and Thompson.
“According to the Government publication New Zealand In Profile, in the same period a litre of 91 octane petrol has increased by 32%, while a 400ml glass of beer and an adult visit to the doctor have both increased by 22%. With the average Auckland house price increasing by 38%in the same period, it means that tenants are not paying over the top in terms of weekly rentals, and that landlords are not recovering in full the current purchase price of properties.”
She said Barfoot data showed the average gross return being made by landlords was 3.5%.
“Given that rental accommodation is in short supply, it means landlords are not taking advantage of the situation to push rentals higher. When we surveyed landlords late last year, less than 20% said that they intended to increase rents in the next 12 months, and of that group, the maximum rental increase they thought reasonable in the current market was 5%. It’s interesting to note that the average rent in Auckland is 68 percent or $198 higher than the average weekly rent for all of New Zealand. It highlights the disparity that Aucklanders are paying in terms of house prices and for rental accommodation.”
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