Auckland landlord returns up for first time in three years

Returns for Auckland landlords are rising. Photo/Doug Sherring

Auckland residential rental yields or landlord incomes rose for the first time in three years according to data from one of the city's largest property managers, Barfoot & Thompson.

"Returns for Auckland rental property owners look to be on the up with gross rental yields for three-bedroom homes in over half the city's suburbs rising in the first half of 2017 compared with the same period last year. This follows a steady decline in rental yields observed since 2014," a statement from the agency said.

Kiri Barfoot, a Barfoot & Thompson director, said this was good for landlords and "exactly what you would expect to happen at some point in response to moderate but consistent increases in rent and slowing of house sales prices".

The average rent for a three-bedroom Auckland home was $537/week on July 1, or $27,924 a year, while the average sale price was $917,415, giving a gross yield of 3.04 per cent, Barfoot said.

"While that's only slightly up on 2016 for the same period, which had a gross yield of 3 per cent it does arrest the fall in yield seen since 2015, when the city-wide average was 3.25 per cent, and 2014, when it was 3.7 per cent," she said.

"The upward trend in rental yield was most obvious in the central suburbs - which include most of the old Auckland City suburbs west of the Southern Motorway - as well as on the North Shore," she said.

Thirteen of 19 central suburbs saw increases in yields compared with 2016.

Ponsonby yields rose from 2.27 per cent to 3.19 per cent, Grey Lynn from 2.58 to 3.05 per cent and Onehunga from 3.03 per cent to 3.15 per cent.

Westmere yields fell from 2.87 per cent to 1.80 per cent, and Mt Eden from 2.66 per cent to 2.22 per cent, the data showed.

On the North Shore, yields lifted in 12 of 15 suburbs included in the survey, compared with 2016. Rothesay Bay had the biggest lift, from 2.94 per cent to 3.79 per cent, while Albany climbed from 3.11 per cent to 3.38 per cent.

In Auckland central, the average gross yield was 4.28 per cent up from 3.94 per cent the year before.