Squeeze is on city rentals
‘‘You have probably got a growing pool of renters – and there probably haven’t been enough investors buying throughout 2017 to replenish.’’
Simon Lugton
Twenty people showed up to view a Hamilton rental listed by Lugton’s the other day.
That was in Rototuna, but rentals are scarce across the city.
Hamilton agencies have fewer rentals available than usual and managers warn rent rises could be coming.
Lugton’s Real Estate had five rentals on its books yesterday out of a portfolio of 400.
‘‘Our property managers say they’re a bit scarce on available properties and inquiry is extremely high at the moment,’’ managing director Simon Lugton said. Renters are making quick decisions – and they need to.
Hamilton’s growing population is contributing to the low rental stock, Lugton said, but there are other factors.
‘‘First-home buyers have found it pretty difficult to get into the market – so you have probably got a growing pool of renters – and there probably haven’t been enough investors buying throughout 2017 to replenish,’’ he said.
If investors don’t buy more rentals, they will have to be built, he said, ‘‘and there’s a lag time on that’’.
He said a three-bedroom standalone house in Hamilton would typically be rented for more than $400 a week.
Trade Me figures agreed, putting the city’s median weekly rental at $400 in December 2017. That’s $10 (2.5 per cent) more than in December 2016.
Several Hamilton agencies said a rent rise could be coming, pointing to factors such as the high demand and law changes making it more expensive to be a landlord. But landlords don’t want empty properties, Lugton said, so any increases would be market-driven.
Lodge property management general manager David Kneebone said this was normally the emptiest time of year for property managers.
But yesterday, Lodge had three rentals available out of a portfolio of 3000.
‘‘There certainly is stronger demand for properties and we don’t have that much supply.
‘‘This week we have about 15 families that have come to Hamilton in the last week or two that were looking for properties. It’s harder work now to find those properties.’’
Kneebone said Lodge had not seen a reduction in the number of rentals, and so far the increased demand hadn’t increased prices.
‘‘You have to price properties affordably, otherwise they stay unrented. It’s not an exploited market.’’
Anecdotally, prospective investors appear reluctant to enter the lower end of the rental market, thanks to uncertainty around incoming regulations.
Kneebone is advising owners to buy well-insulated homes for rentals.
In many cases, rentals are vacant for just a day or two before the new tenants move in, Harcourts general manager Melanie Rouse said.
Renters are snapping up smaller houses in Flagstaff and Rototuna – because they’re rare – and areas such as Pukete and St Andrews are always renter favourites.
Harcourts definitely has fewer rentals available than usual, she said.
That’s partly because it got student rentals signed up earlier and partly because new LVR (loan-to-value ratio) laws seemed to stop people from buying investment properties.
Rouse’s money is on demand getting level with or even exceeding supply in the near future, so she said investors shouldn’t be nervous.
Legislative changes in areas like insulation are workable with good advice, she said.
‘‘We’ve got more people moving to Hamilton and the development sites are not going to be finished in time.’’
There were 59 per cent fewer Hamilton rentals available in late December 2017 than a year earlier, according to Trade Me data.
There was also a 10 per cent increase in views on Hamilton listings.
Trade Me does not release the figures behind those percentages.
New listings on the site don’t tend to stick around long, head of property Nigel Jeffries said, and that’s unlikely to change soon.
‘‘There’s no indication that it will become a supply-driven market,’’ he said.
‘‘We expect the excess demand to remain for the next 12 months.’’
Hamilton renters can find about 485 live listings on the site mid-January.