Studies from the University of Auckland’s Business School indicates the work-from-home movement brought on by the pandemic saw rents increase in the city’s fringes.

Published in the International Journal of Housing Markets and Analysis, the analysis was undertaken by academics  William Cheung and Edward Yiu, together with Daniel Wong of Tamaki Regeneration Company.

Rental listings from 242 Auckland suburbs were analysed between 2013 and 2021, as well as micro-level household data from Statistics New Zealand. The trio applied a rental gradient analysis to compare rental prices before and after the pandemic, coming to the conclusion that the difference between rents in the CBD and the outer suburbs was considerably less after 2021.

Cheung attributes the rising rents on the city fringe to flexible working arrangements made possible by the pandemic.

“We found that rents were increasing more in lower-density suburbs and that the city experienced rental gradient flattening, meaning the difference in rental prices between the city centre and suburbs further out became less pronounced post-pandemic,” he says.

“Typically, the city centre is supposed to be the most expensive part of the city, and as you move out towards the city fringe, and further, rents usually decrease. But because many people had the freedom to work from home, more people decided to live in the city fringe areas. And because they did that, it pushed the prices up.”

Cheung  believes that working from home is completely upending the city’s rental structure through creating an increased demand for rental properties on the outskirts.

“The early rental gradient and the micro-level household data analysis confirm a shift towards working from home, and I think it will likely be a long-term shift. Instead of resisting the change, organisations should improve their remote work policies and capabilities.”

The study speculates that the shifts will result in changes to urban planning and government policy, with the trio recommending policy makers factor in the needs of those who work from home when considering housing and transportation projects.
 

To read the study in full, click here.