Auckland Property Insight December 2019
Healthy Homes Compliance & Residential Tenancy Act
Healthy Homes Standards
This month in our latest CPII survey in association with IPSOS, we asked respondents if they were aware of the new healthy homes standards that came into effect on 1st July, 2019. Encouragingly, 96% of respondents were aware of the changes; however, 26% of respondents were unaware of their obligations under them.
Residential Tenancy Act Changes
We have also asked investors about the changes to the Residential Tenancy Act – an example of a change being made to this act is limiting tenants’ liability for careless damage in rental properties. The percentage of those aware of at least some of the changes has remained at 84%.
What Tenants Are Looking For
We also asked investors about the changing needs of Auckland tenants and how much they agree with tenants’ being able to make minor alterations to a property.
Changes in Property Features Sought
We asked respondents if tenants were looking for specific features when seeking a rental property. Some 28% of respondents believed that they had noticed tenants looking for specific features in a property, a 4-point increase on November 2018
Key Property Features for Tenants
Those who thought that tenants were looking for more specific property features again most commonly mentioned insulation, although this time heat pumps were also top of the list. This most likely reflects changes to legislation that now require insulation in rental properties. Fresh paint / wallpaper is the least important feature that tenants are looking out for.
Crockers Property Investment Index
Both the Auckland Rental Property Investment Index and the Auckland Rental Property Performance Index have increased this month, as a result of an increase in those who believe the market will improve.
Suburb Review: West Auckland
Average rents across West Auckland remain below the average for the greater Auckland region (Pukekohe to Rodney). Over the past 12 months, West Auckland 3-bedroom rentals have had an average weekly rental price of $555, a 4% growth on the previous year, while in comparison, Auckland 3-bedroom rentals have experienced 3% growth to $648. The average rental price for two-bedroom rentals in West Auckland is $461 (4% increase on last year), compared to $512 for greater Auckland (a 3% increase on last year).
Looking at individual West Auckland suburbs, rental prices for 2-bedroom homes have experienced the largest increase in Te Atatu (7%), whilst 3 bedroom rentals have increased by 5% in West Auckland.
West Auckland suburbs experienced substantial growth between Oct ‘15 and Oct ‘16; however, over the past couple of years, growth has stagnated as greenfield development slowed down. Upper Harbour remains the suburb with the highest average sales price ($920k), whilst Glen Eden remains the suburb with the lowest average sales price ($698k).
Sales volume has remained stable in the year to October 2019. When looking at the results over time, there was a notable decline in sales in Henderson between the period of Oct ‘15 to Oct ‘17. Sales in this suburb are yet to recover from this decline.
Auckland Sales & Rental Update
Auckland Median Prices & Sales Numbers
The median sales price for Auckland residential properties increased from $848k in Sep ‘19 to $868k in Oct ‘19; the median sales price sits at a higher point than Oct ‘18 ($861k) and Oct ‘17 ($850k).
The sales volume also increased from 1,823 in Sep ‘19 to 2,025 in Oct ‘19, suggesting that the market is being stimulated once again after a period of cooling.
Auckland Rental Prices
The average Auckland rent for 2-bedroom residential properties increased from $514 in Sep ‘19 to $516 in Oct ‘19, while the average 2-bedroom rental across New Zealand also increased from $430 to $440. This has resulted in the Auckland 2-bedroom premium decreasing from 20% to 17% this month.
The average rent for 3-bedroom properties in Auckland increased from $642 in Sep ‘19 to $645 in Oct ‘19, whilst the 3-bedroom rental prices in New Zealand increased from $500 to $520. This has resulted in the Auckland 3-bedroom premium decreasing from 28% to 24%.