As we approach the midpoint of 2022 and a traditionally slower period for the residential rental market, we’re seeing nothing of the sort here at Lodge City Rentals. Nearly all our May stats increased on the previous month, including a considerable jump in the number of tenant applications received. Our team leased 143 properties during May and saw good growth in our portfolio, which will assist the numerous people contacting us daily looking for rentals.
Last month I noted that we expected to see an increase in the number of international students arriving after the Government opened the borders. However, the number of applications for student visas has not matched this prediction, so we’ll join others linked to the sector in hoping students return in more significant numbers in 2023.
One area of growth for our industry is the accidental landlord sector. As part of this blog, I’ll explain what an accidental landlord is, and what is contributing to their increasing numbers.
Plus, you may have read the news in the last few weeks that Hamilton’s GDP is outstripping other major New Zealand cities, climbing to $12 billion in 2021 – a 4.3% increase since 2019. Later in this blog, I note why this statistic and others prove that Hamilton is certainly in a growth stage, and why this points to sustained demand for rental properties.
Accidental landlords – who are they and what is causing this trend?
An accidental landlord is someone who hasn’t entered the rental property market with a long-term investment plan, but rather as a result of a particular situation such as an employment transfer, divorce, or growing or shrinking family creating a need to move house. Whilst generally they would have sold their property and purchased another, due to the current real estate market they are either unable or unwilling to sell their home.
While it’s anyone’s guess (and plenty are forecasting) where house prices might go over the coming months, it is generally accepted that the market is now cooling. And if vendors receive offers well below their expectations, but are committed to moving, renting their property becomes an attractive option.
If you find yourself or someone close to you in this situation, do reach out to our team to start the straightforward process of engaging a property manager and signing up your property. We know becoming an accidental landlord can be a learning curve, so are happy to answer questions on legislated requirements under the Residential Tenancies Act, how to comply with Healthy Homes standards, and your general rights and responsibilities as a new landlord.
Who knows? You may discover the world of property investment and get hooked, with your current property forming the base of your portfolio. The accidental landlord trend is also beneficial for the wider market, as it means much needed rental stock is being added to meet the strong tenant demand I noted at the start of this blog.
The stats have it: Hamilton in growth mode
One reason we predict strong tenant demand will continue in Hamilton is due to city growth trends. Along with the GDP figures from a recent Hamilton City Council report, the city built a record 1,497 new homes in 2021, up 6% on 2020.
This strong economic activity shows that Covid’s challenges have not damaged the city’s resilience, nor its ability to attract new residents; Hamilton’s annual population growth has outpaced Auckland, Christchurch and Wellington every year since 2006.
Our own statistic matches this trend, with 24% of new tenancies in May signed by people emigrating from other cities and regions and relocating to Hamilton. We often share the message that Hamilton ‘is the place to be,’ so it’s great to see the data proving more and more new residents agree.
Remember, our team are always here to chat about any thoughts or concerns, otherwise I’ll see you in July.