Since short-term rentals can provide a significantly higher cash flow compared to traditional renting, buying a property to put it on Airbnb is a popular choice among real estate investors. The most important step is to find a favorable location, which requires thorough market research to make an informed decision.
If you're considering starting an Airbnb in New Zealand, the best places to look for a property are cities with many visitors, such as popular travel destinations. In this article, we'll share insights into the Auckland short-term rental market, which is thriving thanks to the city's growing tourism industry and relatively favorable regulations.
Auckland Rental Market: Key Facts about Short-Term Rentals
Based around two large harbors, Auckland is a large metropolitan city in the North Island of New Zealand known for its pristine beaches, stunning landscapes, and diverse and vibrant culture. Auckland is a fantastic place to live and do business and a perfect tourist destination for domestic and international travelers.
Since a lot of today's travelers are looking for alternative accommodation, and the popularity of Airbnb continues to grow, Auckland can be a lucrative market for Airbnb investment. Remember that running a successful vacation rental property requires more than just listing your home or apartment on popular OTAs like Airbnb, Booking.com, or Agoda.
Airbnb hosting is hard work that requires effective management and a commitment to providing an exceptional guest experience. It will be much easier to achieve operational efficiency if you automate repetitive tasks using vacation rental software like Hospitable. Then, you'll have more time to focus on tasks that require strategic planning and a personal touch.
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According to the latest data from Airbtics, from July 2023 to May 2024, 5,437 active Airbnb listings in Auckland were available for bookings for more than 90 days. Interestingly, compared to the previous year, an increase in the number of listings is 35.86%, and a 2-year supply change is 182.88 %.
Still, only 18.86% of active Airbnb listings this year are the same STR properties that were active last year. This means that many listings have become inactive, and even more new ones have entered the Auckland Airbnb rental market.
The statistics also show that individual and small hosts dominate the Auckland short-stay rental market. 94.75% of Airbnb hosts in Auckland manage 1-5 listings, 4.17 % of hosts list 6-20 vacation rental properties, and only 1.08 % of hosts have 20+ listings.
The average occupancy rate for short-term rental properties in the city is 72% throughout the year, and the average daily rate (ADR) is $92. A typical host income (annual revenue) in Auckland is $24,904, although hosts who manage prime properties in desirable locations can earn much higher revenues.
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Auckland Short-Term Rental Market Performance in 2022-2024
Let's take a look at the key performance metrics to get a better understanding of the dynamics of the Auckland vacation rental market in 2022, 2023, and the first five months of 2024.
Average occupancy rate
The Auckland short-term rental market experiences fluctuations influenced by seasonality, major holidays, and vibrant sporting, arts, and cultural events. Peak season runs from November to March, and the city has a lot of visitors in summer as people flock to the beaches and waterfront. The shoulder months in Auckland are May and September, when it's still warm. The low season is from June to August, featuring cooler temperatures, but still, many people visit Auckland for whale watching and shopping.
The average occupancy rate in Auckland in 2024 was lower than in 2023 but still higher than in 2022. The highest occupancy rate of 96% was in March 2023. Comparing 2024 to 2023 and 2022, we see a growth of 4.35 % over two years.
Average daily rate (ADR)
Average daily rates in Auckland in 2023 were higher than in 2022 from January to November, and only in December 2023 was the average daily rate ($93) lower than the average daily rate in December 2022 ($96). From January to April 2024, the ADRs were lower than in 2023. But in May 2024, the average daily rate was slightly higher ($90) compared to May 2023 ($89). Still, ADRs generally saw a notable increase of 12.2 % over two years.
Revenue
From January to September 2023, the monthly revenue was higher each month than the monthly income Airbnb hosts in Auckland had in 2022. From October to December 2023, the monthly revenue was lower each month than in 2022.
From January to May 2024, STR hosts earned less each month than during the same month in 2023. However, in general, the Auckland short-stay rental market saw an increase of 13.36 % in annual revenue over two years. The highest monthly revenue for an Airbnb property reached up to $2,986 in February 2023.
Final Thought
These data show that although the performance of the Auckland Airbnb rental market hasn't returned to pre-pandemic levels, it offers big potential benefits for investors. Thanks to the city's growing tourism industry, the demand for vacation rentals is high, providing a steady income stream for Airbnb property owners.
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