Statistics suggest Landlords are not increasing rents unrealistically. While there was a flurry of activity at the end of 2014 and the being of 2015, the past five months have seen only small increases in weekly rents.
The Trade Me Rental Price Index is a reliable guide of weekly rent price variation due to it’s monopoly status as the primary channel utilised by property managers and private landlords for marketing rental properties.
Percentage increases in the year to July 2015 were 6.3% in median rent nationwide and a 4.3 percent nationwide excluding Auckland. Auckland’s median weekly rent increased by 7.6% which is modest compared to Auckland’s property values which have grown by 20%. This statistic suggests landlords in general are not unduly trying to rip off tenants as some articles online suggest.
Rent increases are subject to market conditions. If there is a lack of supply of rental properties tenants are prepared to pay more but they’ll move to a cheaper rental property as soon they can. Landlords who have been in the game for a while realise its a balancing act – to achieve optimum rent with low tenancy turnover.
Rogue landlords will always push the boundaries but they are just that – a few rogues their actions are not typical of the vast majority of landlords.
Auckland Property Managers recommend setting rents at market rates so landlords can secure tenants on long fixed term agreements. Rent prices way above the market rate are unsustainable resulting in high tenant turnover which can end up costing the landlord more in the long run.