New apartments in city see rents rocket

A surge in new apartments and townhouses has caused average rents to spike in Hamilton.

While the average Hamilton city rental increase sits at 5 per cent – 1.3 per cent across the Waikato – apartments, townhouses and one- to two-bedroom houses are showing extraordinary increases, according to online auction site Trade Me data recently released.

Townhouses are showing a 14 per cent rental increase, small houses a 21 per cent rent increase and apartments in the city show a whopping 25 per cent increase.

That’s compared with units, which show a 9 per cent increase, and houses, up 2 per cent.

Rents for three- to fourbedroom houses are up 5 per cent.

The double-figure increase raised the eyebrows of Hamilton property agents.

Lodge City Rentals managing director David Kneebone said the figures are vague.

The 25 per cent increase for apartments takes them from $240 to $300.

‘‘Most apartments in the city are two- to four-bedroom and in the range of $400-$650, so going from $240 to $300 is mystifying,’’ Kneebone said.

One- and two-bedrooms flats and units have increased about 5 to 7 per cent – in line with the overall market in the city. Big jumps have come as a result of extensive renovation.

There is a squeeze on in Hamilton – ‘‘That is for sure,’’ said Kneebone – and as a result, rents have moved up.

‘‘There is a strong demand and there are developers, I can tell you now, that are looking at pulling out when they are looking at the new rating regime coming in, and that’s only going to exacerbate demand in that area,’’ Kneebone said.

Head of Trade Me Property Nigel Jeffries said it could be down to new apartment blocks coming on to the market, which can affect price.

Lugton’s Real Estate managing director Simon Lugton was surprised by the Trade Me data.

‘‘They do seem like big numbers but the only explanation I can say there are maybe new apartments coming on that are a bit bigger and raising the standard,’’ Lugton said.

Harcourts Rentals general manager Melanie Rouse agrees.

The Harcourts portfolio shows an 8 per cent increase – not the huge jump reported by Trade Me.

‘‘It’s not an existing property that’s gone up 21 per cent, it could be that newer stock is coming in at a higher rate,’’ Rouse said