Residential Rental Market Summary

The onset of winter sees most people hunkering down for the season, and this is reflected in our rental portfolio, with occupancy rates remaining solid at nearly 99% capacity.

After remaining steady over the past few years, student numbers at the University of Waikato are this year down 3.2%. This has led to some interesting dynamics; negative growth in student numbers has placed pressure on filling accommodation in suburbs that surround the tertiary campus.

Older, larger, homes (1960s) in particular appear to have fallen out-of-favour with many students. The preference has turned toward smaller but warmer, modern accommodation – which developers have been furiously building in recent years. In the past year alone, about 300 new rooms have been added to the pool of student accommodation. To compete, landlords who own the older style accommodation have been forced to at least fit heat pumps and add insulation; the alternative is to suffer a major reduction in rent.

The picture is quite different in other parts of the market. For example, upward pressure is being placed on rents for city-fringe properties and executive rentals in the north-east. Traditionally, $500 per week has the rental cap for top Hamilton properties. But the $500-barrier has been well and truly breached recently, with tenants prepared to pay well in excess of historical levels in their bid to secure what they deem ‘the right property’. During May we began collecting rents of $750 per week for one property, and $1000 per week for another property.

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