An expert’s opinion on rental prices

Below is an article that was in today’s NZ Herald, reflecting a fair representation of the rental market. This also follows on from my earlier blog comments. Happy reading:

“Renters can strike a bargain when moving into a vacant property but they won’t avoid rental price increases, a property expert says.

Property developer and commentator Olly Newland’s comments came after Barfoot & Thompson figures suggested Auckland tenants could expect rental increases of an average $21 a week.

In its report last week, the real estate company said rental rates in Auckland had increased in the year to November 30 by 4.6 per cent, and similar increases could be expected this year.

However, figures out yesterday from Trade Me Property found no change in rental prices for Auckland for the year to December 31.

Mr Newland said the reason for the different figures was that the properties listed on Trade Me were often vacant.

Landlords of vacant properties would cut the initial rental price to attract a tenant, with the intention of increasing rents within six or 12 months, he said.

Barfoot & Thompson was working with figures from established rental properties, which had regular rent increases, he said.

“So you’re seeing two markets, if you like. The Trade Me market has people offering attractive rents to attract tenants, and then you have the rest of the world … where tenants are quietly paying a little bit more.”

While rental prices were “creeping up”, the costs were not dramatic, Mr Newland said.

“It’s quite usual for a property every six months to go up another 5 per cent or something like that.”

Barfoot & Thompson director Kiri Barfoot said staff regularly reviewed rent prices. They were in the business of pushing up rental prices for the landlords, Ms Barfoot said.

“Maybe we’re more proactive than someone who looks after [properties] themselves and just wants to get tenants in and doesn’t realise they can [increase rents].”

She said the 4.6 per cent increase in rent in the Auckland area was “modest”.

Trade Me Property head Nigel Jefferies said generally the firm was measuring new tenancies and not renewals of rental figures.

The company’s figures out yesterday were good news for new tenants, as figures over the past five months had remained stagnant, with an increase of just over 5 per cent in the last year.

For the fifth consecutive month, the stable rental market saw national median rent unchanged at $400 per week, Mr Jefferies said.

“We saw the national median weekly rental land at $385 in January, then it gradually eased up to $400 in the middle of the year. It stayed there for the rest of 2014.”

Auckland had ended the year at the same level as a year ago, with a median asking rent of $450 per week on the site.”

(The above, courtesy of NZ Herald.)