With data not yet available for February, rent rises so far look modest. Anecdotal evidence, however, points to some major increases in rents across Auckland in the early months of this year. We’re hearing from property managers that rents have never been higher – up by between 10% and 20% on last year’s prices.
There’s about whether rents can continue to increase: one school of thought is that flat incomes mean there’s a natural cap on rents. The opposing opinion is that prices are so high compared to rents that they will naturally be dragged up.
The feeling here at FUZO Property is that rents will steadily increase, despite flat incomes. Partly that may be wishful thinking, but partly we’re wondering about what those people who have been unable to buy a first home are willing to spend on rent. We hear a lot about those on good incomes who can’t afford a house, so presumably they’re able to pay more rent. Despite the market dip, listings are tight and immigration unceasing; it’s hard to see where any downward pressure might come from.