November 6, 2020
About 1.42 million people call Auckland, New Zealand home and yet,
it has the lowest percentage of homeownership in the entire country. This means it has the highest rental tenancy rates, making it ideal for landlords.
The reason for
Auckland’s low home ownership rates is largely due to the incredibly high
prices of the homes here – the median price for a home is $910,000. So, 42% of
the city’s population chooses to rent homes instead of buying.
What does
the profile of an average renter in Auckland look like?
Male and female
renters are nearly equally represented in Auckland. Tenants are of varying ages but the average age of
a renter is around 43 years old. The city has a multicultural population and nearly
50% of renters are born overseas.
Work and
income profile of renters
The median renter’s
household income is placed at about $70,000. Sources of income are largely from
wages (68%) and about 12% are self-employed. Other sources of income are
scattered with some households depending on welfare, interest/dividends,
pension, superannuation and rent among
others. 74% of employed renters need to drive to work and the average commute
is about 25 minutes. So, it’s not surprising that nearly 45% of households have at least one
car and almost 35% of households
have two cars or more. Only
about15% have no cars.
Household structure of
Auckland renters
Statistics among
renters in Auckland show a median of two
member households with 58% of renters being married. There are a number of
families in the city as well, and
the figures indicate that 43.7% of Auckland’s children (i.e. under the age of
15) live in rental properties. This may be the
reason that the most preferred type of rental property is a
home with three bedrooms. The
demand for houses with two bedrooms comes a close second. Other choices
include houses with four
bedrooms, and then one bedroom properties.
Rent and
tenure in Auckland
Auckland is one of
the most expensive cities to rent a
house inwith the average rent in Auckland hovering around $550 a week. An apartment may cost you
around $500 and a townhouse will be about $630 weekly. Units are less expensive to
rent at about $450. A three to four-bedroom unit would be around $600 and you
could expect a five-bed place to be $850, depending on the
suburb.
The most common type
of tenure is one-year fixed arrangement. The other type of tenancy available in
Auckland is a periodic tenancy. With this arrangement,
the tenancy will continue for as
long as both parties (tenant and landlord) want it to. To end this type of
tenancy, one of them must issue a
written notice. Tenants need to provide 21-days’ notice and landlords need to
provide 90 days. If the landlord intends to sell the property then 42 days is considered to be sufficient
notice. This is also applicable if the landlord intends to put up a family
member in the space that the tenant is currently occupying, or move back in
themselves.
It must be noted
that 46% of renters have moved from
their current homes in the last two years and the main reason for this high turnover is that the property they were renting
was sold. The next biggest reason for
renters moving house was to find better
quality accommodation. Other reasons cited for moving include finding cheaper
accommodation, moving closer to work, the end of a relationship, health reasons
and wanting to move closer
to family.
Tenant
concerns and relationship with landlord
The biggest concern cited
by tenants when it came to renting was hikes in the rent. In fact, rent in Auckland is not
highly regulated, the sole restriction is provided by the RTA or the NZ
Residential Tenancies Act which allows rent to be raised only once every six
months.
The aspects of
rental properties that tenants would most like
to see an improvement in are insulation, heating and kitchen spaces.
Nearly a quarter of
the tenants in Auckland felt that their rental applications had been turned
down unfairly. But tenants in
Auckland do value having a good relationship with their landlord.
Responsibilities
as a landlord
If you are a
landlord in Auckland, you will already be aware of the demand your property has
in the city and that being a landlord is more than just about collecting rent.
A landlord has plenty of responsibilities from ensuring records are kept
accurately, maintaining the property to a specific standard, making inspections, being available to
answer questions from new tenants and so on. If this is not your primary source of
income, managing all of this
after work hours and on weekends can be taxing. Whether you have just
one property or a larger
portfolio that needs to be taken care of, experienced professionals from a property management service can look after your responsibilities.
If your investment
property is in Auckland’s North Shore, the Hibiscus Coast or Warkworth have a
look at Morison Property. They can help you manage everything from tenant
selection, choosing rental rates, rent collection, and ensuring adequate
maintenance of the property. They offer competitive prices and more services
than most. Using a property manager takes the workload and the worry off your
shoulders, and allows your rental property to be truly a passive income source.
To find out more about Morison Property take a look at their website https://www.morisonproperty.nz.