Quality rentals in short supply in Hamilton, despite investor activity
Published on: 2016-07-25
Investors requiring 40% deposit will do little to slow Hamilton's real estate market believes Lodge Real Estate managing director Jeremy O'Rourke. Already Hamiltonians looking to rent or buy are finding it challenging, say Mr O’Rourke.
“Our rental division currently manages 3403 rental properties, which is 115 more than one year ago.
“One reason for the increase is more properties have come on the market due to investors building their rental portfolios in the current market.
“However, the challenge for renters is that quality properties are snapped up quickly. Lodge only has 57 vacant properties available, whereas we had 86 vacant properties available for rent one year ago,” he explained.
Mr O’Rourke said approximately 40% of Hamilton’s residential properties were, in fact, investment properties available for rent.
“Forty percent is relatively high compared to cities such as, Tauranga, for example. Our high student population primarily drives this larger rental pool.
“What’s also keeping Hamilton’s rental stocks high is existing property investors restructuring their portfolios. Many are getting out of traditional rental homes in our western, eastern and southern suburbs and shifting to higher value rentals in the northern suburbs of Flagstaff and Rototuna,” Mr O’Rourke explained.
He said those exited properties are allowing new investors to get into the market for the first time, or first home buyers to get into lower value properties.
However, property investors getting into the market for the first time need to be prepared for the capital investment required.
“Traditionally, first-time investors often go for lower-priced properties that allow them to start their investment journey. However, it takes a lot more capital today to get started.
“For instance, one year ago 28% of the homes sold in Hamilton were under $300,000. Today, that’s only 6%,” Mr O’Rourke said.
The Real Estate Institute of NZ released statistics for June 2016 last week. Hamilton’s media house price now sits at $485,000, which is an increase on $480,000 in May 2016.