Rents on the Rise

Lodge City Rentals managing director, David Kneebone, said the company’s 3000 Hamilton rental properties are almost fully occupied with demand from tenants wanting quality family and executive homes the highest he has seen since the company started managing properties in 1982.

Kneebone said in the past three years he has seen a trend emerging with tenants staying a lot longer in good quality rentals.

“The industry standard is around 80 per cent of tenants will change houses or move on within a year, but in the past three years we have seen this figure get less and less, as more people stay on in the same property for longer,’ said Kneebone.

He said Lodge’s tenant churn had reduced to around 50 per cent or less moving within a year. 

“While we’ve seen this trend emerging for years, and the introduction of the LVR to first home buyers has, in the past six months, really slowed things down again, which is putting increasing pressure on occupancy rates and demand for more good quality rental accommodation,” said Kneebone.

High on the priority list are executive and quality family homes with three to four bedrooms and two bathrooms, particularly in the northern suburbs.

But he said the shortage of these homes was right across the City, with the exception of the University area where student accommodation was popular.

He also said rents, particularly for better quality homes, had risen, on average by five to seven per cent as demand continued to outweigh supply.

“Investors do have a sense of this and are entering the market in increasing numbers. Over the coming months the real estate market expects investors will place increasing competitive pressure on first home buyers.”

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