Fixed term tenancies most popular
Periodic tenancies have long been the most popular option for rental tenure arrangements, but that has now changed, new Barfoot & Thompson data reveals.
Wednesday, November 30th 2016, 3:30PM
by Miriam Bell
According to Barfoot & Thompson’s data, fixed term tenancy agreements accounted for 51% of tenancy agreements in 2016.
Traditionally, periodic tenancies have been more popular in the Auckland market and this is the first time that fixed term agreements have surpassed them.
Barfoot & Thompson director Kiri Barfoot said the growing numbers of people living in rental properties has sparked debate about the terms and conditions of renting, particularly around security of tenure.
But there hasn’t been much data presented as part of this discussion, she said.
“Our last five years of data show that fixed-term tenancies are increasing in popularity thus providing security for owners and tenants.
“In 2012, fixed-term agreements accounted for 35% of tenancies across our Auckland portfolio… Now, in 2016, fixed-term tenancies have increased to 51%.”
This shift is a bit of a sea change: Just last year Barfoot & Thompson’s data showed periodic tenancies remained first choice for tenancy agreements.
The most common fixed-term tenancies are six to 12 months in duration, followed by 12 months plus, and less than six months.
Barfoot said it used to be that when a fixed-term tenancy ended and the tenant and owner agreed to continue, “defaulting” to periodic was common.
“But now people are opting to resign for another fixed term.”
However, the data also shows that duration of tenure has remained steady – although just one in ten renters has lived in their home for more than five years
Average tenancy duration in Auckland across all areas and property types decreased slightly from 24.8 months in October 2012 to 23.6 months in October 2016.
The areas with the longest average tenancies were the central suburbs with an average of 27 months and South Auckland with 26 months.
The most stable suburbs – those with average tenancies over three years – include Balmoral, Lynfield, St Johns, Paerata (Pukekohe North), Mangere Bridge, Devonport and Green Bay.
Barfoot said that tenancy duration is influenced by a lot of factors.
The most stable suburbs were popular with families, while tenancies tend to be shorter (at around 17 months) in the inner city where a high proportion of renters are students, she said.
“Additionally, a 36% increase in new apartments means the rental market is still growing and evolving.”
Barfoot said landlords recognise tenants are looking for a place to call home.
“Security of tenure is just one element as a lot of people still want flexibility which comes with a periodic agreement.
“What’s most important is that tenant and landlord’s needs and expectations match. Security of tenure for those who want it is a great outcome.”
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