Are you left wondering why Auckland rents are falling? We explain what’s happening and potential reasons why. Learn more now. As the property market slows down, Auckland rents are also dropping. Rather than having empty rentals, landlords are moving with the market and lowering their rent around $10-20 per week. Some higher priced rentals are even see rent reductions of around $50 per week too. Today we’re sharing what’s happening Auckland rental prices.
What’s Happening with Auckland Rents?
Media headlines are full of news on the rising costs to purchase a property, plus how weekly rents continue to rise throughout New Zealand. In Auckland however, the property market is slowing. The average asking price has dropped $350 year- on-year to $918,650 in May 2018. The rental market seems to be following suit, with landlords hesitating to raise rents much. 2016 saw Auckland rents rise around 5%, then between 4.2 and 4.3 per quarter in 2017. But between January and March 2018, the average rent rose only 3.2%, the lowest rent rise in two years. But these rent fluctuations are only averages throughout the Auckland region. There are suburbs within Auckland where not even a small increase occurs and they’re some of the areas where we’re seeing landlords drop their weekly rent.
Why Are Auckland Rents Dropping?
There’s no one reason we can pinpoint as to why landlords reducing their weekly rentals. But here are some reasons why: Oversupply of rentals – the more vacant rental properties, the more particular tenants can be about which one to rent. An oversupply of rentals naturally leads to more vacant properties. To reduce their losses, landlords are renting them out for a lower rate. High rentals are off putting – if a property has a weekly rent of more than $500, it is harder to find the perfect tenant than a lower priced rental would be. Tenants are often saving for their first home and every dollar they don’t need to pay for rent is a dollar saved toward their home. This can lead to landlords lowering rent to attract the right tenants. Moving to the provinces or other suburbs – Auckland is known for it’s high cost of living. Money can be saved by moving away from the Auckland region, or to a cheaper suburb. A lower rent is a great incentive to a tenant to stay locally. As a landlord, you have a choice. You can wait for the ideal tenant who will pay your higher rent to come along. Or you can sign up another great tenant at a lower weekly rent now. If you’re not sure what the correct rent you should be charging is, we can help. Contact us today for a free rental appraisal and avoid those empty money sucking rentals today!