92% of Hamilton renters saw a rent hike last year

On average, those tenants faced an increase of $28/week, translating to a 5.6% rise, mirroring inflation rates.

Can rents continue higher from here?

Several factors will influence the next move for rents:

1. Strong Demand: Population growth remains strong. Latest stats show NZ’s had net annual migration of +111k for the year to March, and many are finding their way to Hamilton. 

2. Sluggish Supply: The construction of new homes is slowing. Kainga Ora has virtually stopped altogether, and new dwelling consents are down 25% compared to last year.

3. Persistent Inflation: Despite lofty interest rates, non-tradeable inflation just will not sit down. Costs for property investors (like rates and insurance) continue to climb. Hamilton City Council has approved a 16.5% rate increase, adding roughly $470 to annual rates bills (more or less $10/week).

4. Deflationary Forces: The reinstatement of interest deductibility for property investors will boost their cash flow, easing pressure on rent hikes. Additionally, home loan rates are expected to soften by year end. Respite exists.

Looking at the list above, my feel is that we’ll see another 3-5% increase in Hamilton rents over the coming 12 months.