With much of the property market news being focused around the ever-increasing price of home ownership and rentals in markets with short supply, this story bucks the trend. From interest.co.nz, Greg Ninnes reports that Auckland has experienced a $60 a week drop in rents for apartments over the past four months. With a significant drop in the number of international occupants over 2020 including tourists booking Airbnb’s and international students, the competitive rents could drop further as more students depart New Zealand to go home. While weekly rent has declined in central Auckland apartments, the number of apartments rented out has almost doubled comparing September 2020 with 2019. The drop in apartment prices isn’t shared by the greater Auckland region, with the entire area seeing a year-on-year increase of 2%.
What does this mean for apartment owners? Given the abnormal circumstances that are affecting the market, it’s hard to forecast what a recovery of average rents would look like without having a clearer path out of international travel restrictions and the fight against COVID-19 as a whole. For the immediate future however, property owners are best to focus on tenanting their properties as consistently as possible, meaning a move for many away from short term stay and Airbnb into more traditional tenancy agreements.
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