Factors combine to entice investors to Hamilton

As Hamilton’s infrastructure woes continue, property developers can’t afford to keep waiting for a solution, so are resorting to selling new builds and existing property sooner than they’d like.

Our sales team are seeing new builds from property developers coming to market sooner than usual, along with existing property that they can’t afford to sit on any longer due to the lag in infrastructure upgrades.

And while developers wait and try to work through these problems, smart investors are filling the void, recognising that with increased demand comes limited supply, which will put pressure on rents to rise.

Investors see the opportunity that exists in Hamilton. They can see the potential capital gains growth, and with rental yields between 5-6%, they can get a good return on their money.

About a week ago the latest Trade Me rental price index announced a national drop in the average weekly rent and an increase in rental listings around the country.

This has simply not been the case for Hamilton.

The national median weekly rent in September was $630, down 1.6% from August and the lowest since January (but still 1.6% higher than the same time last year). The median cost of a rental in the Waikato is down only 0.9% to $580.

The report also puts the national average rental supply levels up 44% year-on-year, attributing the increase to more people leaving the country and younger people choosing to stay at home for longer.

Rental demand in Hamilton, however, remains resolutely high with no signs of slowing any time soon.

There have been many key moments in the last 12 months that have contributed to the rental economy we find ourselves in currently.

A couple of OCR cuts, lowering interest rates, and a raft of government announcements aimed at making lending easier and more affordable have helped steer us in a direction that is making Hamilton an even more attractive investment proposition. 

Other city-wide announcements are also adding to this scenario. International flights out of Hamilton are set to resume next year, key new builds such as hotel accommodation and the regional theatre will further revitalise the central city, and more expansion is planned for the inland port and an additional freight hub by the airport. There’s a lot to be excited about.

Next month I’ll attempt to summarise the previous year’s key moments, ones that have shaped the local rental sector as we know it today. 

December will be our last newsletter for the year, and with 2025 fast approaching, what will your investment plans be?