Congratulations to all of us who are lucky enough to be living in NZ during this pandemic. Now fingers crossed that we are 15 days + in a roll without any confirmed cases of Covid-19 in NZ, victory is insight, our sacrifice has paid off.
As a property investor, you might wonder what’s happening right now in the Auckland property rental market. Make no mistake, people are being impacted by Covid-19 and rents are being affected. Let me start with sharing some data and examples.
Observation 1:
Average days on the market is 30-35 days at the moment which means it takes longer to rent out a property at the moment. However, with exception of the apartment market, rents overall are firm and there is still demand in the marketplace. One of the reasons that it now takes longer to rent out properties is the increasing amount of available properties on the market due to lease breaks and properties that used to be rented as short term accommodation coming back into the market.
Observation 2
Standard family homes are renting reasonably fast for properties at the $600 to $800 range if the properties are priced correctly and are in reasonable condition. Compared to the same period last year, rents are similar in this market segment with a slight decrease of approximately 5%. Prospective tenants as always are looking for location, good condition and affordability in a rental home. If a property is spacious enough or can accommodate more people, it will rent first.
Maioro Street, New Windsor – $680 – 3Bedroom x1Bathroom – 11 days on market rented out.
Oakley Avenue, waterview – $670- 3Bedroom x2Bathroom – 6 days on market rented out.
Observation 3:
Higher end properties with asking rent of over $1,200 per week are taking longer to rent out and we are seeing at least 10%-15% drop in rent due to a combination of seasonal fluctuation going into winter as well as the impact of Covid.
Spencer Street, Remuera – $1400- 4Bedroom x3Bathroom – 35 days still on market.
Observation 4:
Inner city apartments are taking a huge hit on rent at the moment due to lack of students and oversupply of properties transitioning from short term accommodation to long term. We are looking at initially 15% drop now maybe up to 30% drop in rent and worse.
Symonds street, CBD – $400 – 1Bedroom x1Bathroom – 6 days still on market.
Vincent street, CBD – $360 – 1Bedroom x1Bathroom – 34 days on market rented out.
Observation 5:
This one is a surprise for us. Even for apartments outside of city centre, it is getting harder to rent them due to the central air conditioning and ventilation system that prospective tenants perceive as a threat.
Lion place, Epsom- $680 – 2Bedroom x2Bathroom – 34 days still on market
In conclusion, most segments of the market are reasonably stable with minor adjustments in price but properties are taking longer to rent. High end market and apartment markets are being hit the worst by the crisis. Prospective tenants as always are looking for location, good condition and affordability in a rental home. If a property is spacious enough or can accommodate more people, it will rent first.
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