Duplexes in Hamilton are developer and investor property du jour
Lodge Real Estate Managing Director Jeremy O’Rourke says one of the developer and investor trends for 2019 has been the rise in demand for duplexes in Hamilton.
“This year we have certainly seen a marked increase in the number of duplexes being constructed right across the city. In fact, according to the Hamilton City Council, the number of consents issued for duplexes has risen from just one in 2014 to 139 in 2019.
“This is due to the fact that the style of property suits both developers and buyers, who are often investors.
“Developers looking to maximise their return can construct two dwellings on the same property footprint as a larger family home. That potentially means a greater overall return on investment, which especially suits mom and pop developers.
“The demand from Hamilton buyers, especially investors, is incredibly strong for new duplexes. That’s because they are perfect for buyers who prefer comfort over size. And for investors, the new duplexes are an easy option as they normally require no retrofitting to comply with new, comprehensive rental regulations,” O’Rourke explains.
Hamilton couple, Beth, 30, and James Chapman, 28, recently chose a duplex building project as their first foray into property development.
“For us the figures stack up better - building a duplex is cheaper than building two stand-alone dwellings. We’re purchasing one piece of land, but will end up with two finished dwellings. In our research we’ve also found rental returns are better for duplex units.
”In general, it made sense for us to invest in the property market rather than other investments because I work in the building industry. We were unable to afford to do the project on our own, so for us a 50/50 partnership with other family members was essential. The higher potential returns from a duplex development compared to building a stand-alone dwelling made it very attractive to both parties,” explains James Chapman.
Duplexes are only one small part of the Hamilton market that is going strong. According to the Real Estate Institute of NZ (REINZ)statistics released today, the city’s median house price has broken the $600,000 barrier for the first time ever at $620,000.
“The residential market has achieved great momentum and with Christmas barrelling down upon us, buyers are urgently working to purchase homes before the holidays hit. We continue to be startled by the sales prices being achieved on quality properties.
“This is especially true on properties between the $1.5-$2 million mark. These residential homes are garnering heightened interest and seeing multiple offers. Strong demand at the top end of the market means there is real confidence in the city as a work and lifestyle destination of choice,” said O’Rourke.
The Real Estate Institute of NZ released residential housing statistics for November today. 358 homes were sold in Hamilton during November as compared to 316 in October and 322 in November 2018.
For the latest REINZ market data for Hamilton, visit www.reinz.co.nz.