The start of July brought with it a reason to celebrate for our Lodge Rentals team, in the form of the inaugural National Property Managers’ Day. Initiated by the Real Estate Institute of New Zealand (REINZ), it was a day to recognise the hard work our property managers and administration team put in to deliver great service to our landlords and tenants.
Whilst there were organised events in other main cities, on the day we hosted our own enjoying some drinks and nibbles amongst the team. Plus, REINZ shared our very own Zack Cathcart’s story on their dedicated event website.
I certainly appreciated the positivity behind the idea, providing an occasion to commend the good work carried out daily in our profession by experienced, qualified property management professionals.
Moving onto the property market at large, you’d be hard pressed to miss the recent headlines focused on the New Zealand rental industry, from ‘Wake up landlords, the rental market has changed,’ ‘Record rental supply and dwindling demand see rental prices drop,’ to ‘Desirable tenants become scarcer as accidental landlords add to rental glut.’
I have a simple response to this; while it may be the case in other main centres like Auckland and Wellington, it’s certainly not what we’re seeing in Hamilton. So for the rest of this blog, I’ll look to discuss the evidence for my statement in more detail.
Rental demand dropping off a cliff? Don’t believe the hype
As you can see manifested in our June stats, my overall message is that Hamilton’s rental property market continues to be strong, despite the rental oversupply reported in other major New Zealand cities.
In June, we had just 48 empty homes on our books available for rent. It’s still a challenge for potential tenants to secure a two or three bedroom property.
Of those 48 empty properties on our books, 31 of them were studio rooms, many of them one bedroom. With only small numbers of international students returning to New Zealand so far, these are the types of properties that remain available.
While our June statistics cooled slightly when compared to earlier in the year, the figures reflect a normal winter period and overall demand continues to remain steady. There’s no evidence that the market has swung to a ‘tenant’s market,’ as has been widely reported, and I see the outlook for property owners as still extremely positive.
Another reason for the steady demand; Hamilton’s growth as a city, attracting talent through increased economic opportunities. The Hamilton City Council’s economic data shows Hamilton is outstripping New Zealand’s other metro cities in terms of economic and population growth rate, with the city’s GDP increasing by 4.3% since 2019. This month has also seen major roading projects open, with the completed Ring Road and final section of the Waikato Expressway.
In addition, the Hamilton Central Business Association has released figures that show business ranks have swelled by around 30 in the city’s CBD including new start-ups, the expansion of existing businesses and people moving into Hamilton from elsewhere.
This growth is also reflected in our own data, as June saw one third (31%) of all tenants leasing Lodge-managed properties moving to Hamilton from out of town. This was up from 24% in May and 27% in April. It shows growing numbers of people are re
locating to Hamilton City for jobs or a change in lifestyle, and many are choosing to rent in the first instance rather than buy. But as I noted earlier, there are currently not enough larger houses to go around for those looking to rent.
I liken the current situation to a ‘perfect storm’; I can’t see demand for rental properties in Hamilton easing anytime soon, but supply isn’t keeping up just yet. However, it marks good news for property owners and investors thinking about expanding their portfolios.
Remember, I am available anytime if you’d like an insight into what is happening ‘at the coalface.’ It can be easy to read the media headlines, but they may not share the full story or reflect Hamilton’s own market.
Until next month,
Jason Waugh
General Manager
Lodge City Rentals