Rental tenure update

Rental tenure update

• Average length of tenancy steady at around two years
• 30% have been in their home for more than two years
• City fringe, South Auckland and North Shore suburbs have longest average tenure
• ‘Periodic tenancies’ most popular
• Reasons for moving on vary widely

Data insights from Auckland’s largest property management company show renters on average are living in a property for around two years, a situation which has held relatively steady over the past five years.

“With so many more people now renting, and at a time of year when there is considerable turnover, security of tenure is a topical issue,” says Kiri Barfoot.

“While we’ve seen some minor fluctuations in the average tenancy length year-on-year across the nearly 13,000 properties we manage, it is consistently within a month or so of the two year mark.” The current average is exactly 24 months for the year ending November 2015.

Of all the tenancies currently managed by Barfoot & Thompson, the majority have been renting the home for two years or less (70%), while around a third have held their tenancy for two years or more. Roughly 1 in 10 have lived in the home for over five years (9%).
“We also manage a number of tenancies that have lasted decades, including some for 25 years and counting.

“An important part of our role is helping both landlords and tenants find a rental arrangement that works best for them, and how long someone wants to stay in a property is a critical part of the equation.

“There are a lot of variables involved, with many different individual circumstances and therefore many different lengths of tenancy desired on both sides.”

Barfoot & Thompson data shows that ‘periodic tenancies’ are the most popular, perhaps because they provide flexibility: “Periodic tenancies are effectively ongoing, but can be reviewed or exited, with the required notice, by either party at any time.”

Ms Barfoot highlighted that length of tenancy trends also vary across suburbs and some property types. “Inner-city properties, which are often apartments and most popular with short-term renters such as students, have a much quicker turnover at just shy of 17 months. This contrasts to the city fringe suburbs, South Auckland and the North Shore which are popular with families and lead with average tenancies of between 25 and 26 months.

One aspect not shown in the data available is why people move on from their rented accommodation. “We don’t currently track this, but experience tells us there are a wide range of reasons why tenancies end. Feedback from our property managers indicates it’s around a 50/50 split between landlords and tenants choosing to end a tenancy.”

However, she acknowledges that compared to those who own their home, length of stay for renters was considerably shorter, and that moving more often could be challenging for families seeking stability and for those on lower incomes.

She says landlords played a major role in Auckland’s housing, and flexibility and communication were critical to being able to respond to the wide range of tenant needs.

“While the data is relatively steady, the rentals sector is changing and evolving. Continued dialogue, at both policy-making and individual levels, is needed to ensure the right balance is being reached for both landlords and tenants.”

For people that wish to stay in their rented home longer term, Ms Barfoot’s advice is to communicate with the property manager or landlord. “While it will also depend on the property owner’s circumstances, more often than not they will be eager to work with you and secure a reliable, long-standing tenant.

“Likewise, there will be renters and landlords looking for the short-term arrangements to suit their circumstances too.”

She says the topic of security of tenure is often also related to the ability to make a home “your own” through such things as redecorating or home improvements, and that is also something that can be helped by open lines of communication.

“It’s a two way street. Landlords willing to accommodate such requests, or fund improvements, will likely find their properties are more attractive to tenants and potentially draw better weekly rents as a result.”

Rental tenancy statistics at a glance

ENDS

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