Auckland rents go skywards  

Auckland’s median asking rent rose by $5 a week to $675 over the month of October, making the city’s rents among the priciest in the world.

Auckland renters are forking out record sums to cover rent.

Trademe data published earlier this month shows that Auckland tenants are having to find an extra $65 a week for rent payments than they did a year ago – an almost 10% increase.

The median asking rent now sits at $675.

Other figures, including the latest report by global real estate agency Knight Frank, suggest an even bigger average increase, with calculations indicating a 13.1% lift over the 12 months to the end of September.

But rather than feathering the pockets of landlords, rent increases are being eaten up by rising costs related to insurance, rates, and interest payments.

Immigration drives demand

Record numbers of new migrants flooding into the country and a lack of rental housing have ratcheted up demand for rental properties.

In the year to September, a record net gain of 119,200 people settled in the country – more than the population of Palmerston North or New Plymouth.

There are not enough houses being consented or built to keep pace, despite the extended period of record low immigration during COVID .

Statistics NZ figures show that Auckland’s population increased by an average of just 16,633 a year between 2018 and 2021, largely due to Covid-related travel restrictions. And yet Auckland Council figures show that 34,554 homes were completed, more than twice as many as required to handle the increase in population.

And when you consider that Auckland’s population declined by 12,400 between June 2021 to June 2022, you’d be forgiven for thinking that Auckland housing stocks were plentiful.

But times have changed – and quickly. Up until March last year, the number of people arriving in New Zealand on work visas was just a few hundred a month. The tide turned in April and by the time September that year rolled around the monthly figure leapfrogged 10,000.

In September 2023 just under 20,000 people arrived in the country on work visas, with Auckland likely the favoured destination. In the meantime, residential construction in Auckland has peaked and is expected to steadily decline over the next couple of years.

Could the new National-led government ease the pressure?

National has promised to put “downward pressure on rents” by undoing several of Labour’s legislative changes, including:

  • Restoring no-cause evictions for rentals. No-cause tenancy terminations were removed under changes enacted by the Labour Government two years ago
  • Ending automatic roll-over of fixed-term tenancies. National has also pledged to reverse the automatic rollover of fixed-term tenancies to periodic tenancies, part of Labour’s changes two years ago
  • National has also promised to allow under-30s to use KiwiSaver for rent bonds

Demand for Auckland rental properties is heating up. Call 0800 GOODWINS for a free rental assessment.