According to the latest bond data from Tenancy Services, rents for apartments in Auckland’s CBD have fully recovered from the disruptions caused by Covid-19 and now seem to be stabilizing. In November of last year, the median rent for newly tenanted two-bedroom apartments was $575 per week, while one-bedroom apartments had a median rent of $450 per week. This represents an increase of $65 per week (13%) for two-bedroom apartments and $60 per week (12%) for one-bedroom apartments compared to November 2022.
The sharp increase in rents can be attributed in part to the CBD market recovering from the impact of Covid-19 lockdowns, which significantly disrupted the flow of overseas students into the country. This resulted in high vacancy rates in the CBD and subsequently pushed down rents. The median rent for two-bedroom apartments hit a low of $470 per week in June 2021, while one-bedroom apartments reached a low of $365 per week in May 2022.
Over the past 18 months, rents have been steadily increasing as overseas students and foreign workers have returned, and vacancy rates have decreased. There are indications that rents may have reached a peak for now and could be stabilizing at current levels. The median rent for one-bedroom apartments in the CBD peaked at $470 per week in July last year and remained at $450 per week for three consecutive months from September to November. For two-bedroom apartments, the median rent peaked at $615 per week in September and then declined to $590 in October and $575 in November.
It is worth noting that a slight seasonal decline in rents towards the end of the year is not unusual, as many overseas students and workers vacate their flats to return to their home countries for the Christmas break. The upcoming months, particularly the first three months of this year, will be a significant test for Auckland’s CBD apartment market as demand is expected to peak with the return of students for the start of the academic year.
My comment for property investors would be to closely monitor the market trends and rental demand in Auckland’s CBD. While rents have recovered and stabilized for now, it is important to stay informed about any potential changes in vacancy rates and rental prices. Additionally, keeping an eye on the return of overseas students and workers can provide valuable insights into future rental demand.
Source from interest.co.nz: https://www.interest.co.nz/property/126078/median-rent-1-bedroom-apartments-auckland-cbd-60-12-months
The opinions and research contained in this article are provided for information purposes only, are intended to be general in nature, and do not take into account your financial situation or goals.
