Kelvin Davidson, Senior Property Economist, Corelogic
30 November 2020
Rental data is sourced from the Ministry of Business, Innovation and Employment based on rental bonds lodged. This data is supplied to us grouped into geographic areas based on statistical area units used by Statistics NZ for the census and as a result do not always match well with common usage suburb names.
The rental data for each area is matched to property price information from our database to determine property prices and therefore yield. The yield is calculated as the annualised rental income divided by the median property value calculated using our E-Valuer.
Hamilton’s rental market is dominated by houses, a reasonable number of flats, but only a handful of apartments. Of the 1,281 properties recently for rent in Hamilton, 963 have been houses (75%), with 229 flats (18%), and only 89 apartments (7%).
In Dinsdale North/Nawton and Flagstaff/Rototuna all recent rental properties have been houses, while Te Kowhai/St Andrews/Queenwood and Fairfield/Fairview Downs have also had high shares (more than 90%) of houses available. Key markets for rental houses have been Hamilton East/University (154), Deanwell/Melville/Fitzroy (143), and Te Kowhai/St Andrews/Queenwood (140).
Markets with high shares of flats include Claudelands (59%), Hamilton Central/Maeroa/Frankton Junction (32%), and Hamilton East/University (29%). The most flats have been in Hamilton East/ University (79), while it’s also had the most apartments (44).
House Size, By Bedroom Count
Looking at houses specifically (963 properties), just over half of Hamilton’s properties (54%) recently on the rental market have had three bedrooms, with 23% having two, and 20% with four. Only 2% had five bedrooms and only 1% one bedroom. It’s common across the country for most of the rental house stock to have three bedrooms.
In the two-bedroom house category, Hamilton East/University (44) and Deanwell/Melville/Fitzroy (39) have had the most recent rental properties available. Dinsdale/South Frankton also had a fair number (31) and two-bedroom properties also comprise a high share of all recent rental houses in this area (40%).
Flagstaff/Rototuna has had the highest number of four-bedroom rental houses available (48), as well as a high share in this category (46%), but Hillcrest/ Silverdale/Tamahere is also a decent market in this category (24 four-bedroom houses recently available, 30% of all rental houses in this area).
Te Kowhai/St Andrews/Queenwood and Deanwell/Melville/Fitzroy have been the largest markets for threebedroom rental houses, with 85 apiece. Dinsdale/South Frankton has the highest concentration, with almost 75% of its recent rentals having three bedrooms.
Rent And Yield
By matching average value to rent we can look at gross yield for three-bedroom houses in each area.
Median weekly rents for threebedroom houses range from $480 in Fairfield/Fairview Downs, Dinsdale North/ Nawton, and Dinsdale South/Frankton, up to $550 in Flagstaff/Rototuna. Dinsdale South/Frankton also has the lowest median value for three-bedroom houses in Hamilton ($523,850), with Flagstaff/ Rototuna the highest ($726,750).
The highest gross rental yields on three-bedroom houses are to be found in Dinsdale South/Frankton, at 4.8%. About half of the other areas of Hamilton have three bedroom house yields above 4%, but Claudelands and Hamilton East/ University are the lowest at 3.8%.
An area such as Deanwell/Melville/ Fitzroy seems appealing from an investment perspective, with 4.6% yield and also a double-digit rise in rents in the past year.