In my opinion property investors should be investing based on the numbers. A critical element is obviously rent and it's likely increase over time. Auckland has a huge shortage of houses, therefore simple economics dictates that with high demand and low supply that prices should go up. Interesting that Auckland rents are not increasing more! Also are rent increases real? Does it really mean that the average house rent is up say 2.3%? Or does it just mean that there are new houses being built in the area, which demand slightly more rent. Therefore these new houses are pushing up the rent averages!https://www.propertytalk.com/blog/an...t-in-auckland/
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Low rent growth in Auckland?
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My experience would be the latter - unless a house is well maintained/updated as time goes on, newer, better maintained, houses will overtake it in terms of achievable rent.
Decorating, new kitchens, bathrooms, roof, exterior paint all come at a cost that an investor will seek to recoup through increased returns.
For low-end homes, there is probably an economic limit, above which low and no (earned) income families cannot afford; at some point there cease to be 'cheaper' places to move in to. The ones they do find end up on the news showing the problems with shoddy housing provided by greedy landlords (neither adjective is inaccurate).DFTBA
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New builds and renovated properties are definitely pushing the average rent statistic up significantly.
Whilst we continue to achieve rent increases for existing stock, our overall average rent per week is rising faster than this rate.
If/when/as smaller minor dwelling type properties are removed from the market we will see the markets average rent rise further.
Can still only rent a property for what someone is prepared to pay and it's not possible to blanket increase every property we manage by $50pw. If that was the case we wouldn't be doing our job!Rentex Limited Property Management - Est. 1988
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If you find an area which has not more room to grow. In some cases that rents have fallen due to increased competition.
These areas are usually also in the 400k-600k price range so not really selling that quickly either.
I guess its filling houses with someone/anyone if it isn't selling, is better than paying the mortgage yourself.
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Auckland only...
Rent over time. At the very least due to impact of renovation and tidy up mentioned above.
Don't see any big decrease long term in prices on the horizon (assuming realistic valuation in first place and not emotional over buy). That's what my crystal ball tells me ;-)Rentex Limited Property Management - Est. 1988
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Originally posted by investorak View PostDo people think rents will increase or values decrease?
Next year further on I think we will see some rent growth if immigration stays high. From listening to friends looking for rentals in central Auckland, they are seeing at the high rent end Kiwi Families with decent incomes looking to be in zone for good schools. At the lower rent end, lots of newish immigrant families.
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