Auckland's property market continues to boil up like a mince pie left too long in the microwave. This will come as nothing new to anyone who's even considered shuffling one foot in the city's property scene.

According to QV's monthly residential value index, the Auckland region experienced a 24.4 per cent increase in its average house value in the year to October. This has bumped the value to a new record of $918,153, putting the City of Sails closely behind the likes of Sydney and other international hotspots.

As price growth continues to reach new heights, there's still plenty of opportunities and reasons to buy property investment in Auckland. Regions like Papakura and Manukau have proven to be a rapidly blossoming area, recording respective growth of 11.4 and 9.5 per cent in the past three months alone.

But you might be wondering how to build wealth without wanting to touch the inferno that is the Auckland real estate market. In other words, what other locations in New Zealand are turning up great property investment opportunities?

All the signs point to Hamilton, the country's rising star in real estate.

The Hamilton hype

According to a November 3 QV article, the city's property market has been building in momentum as attention swings from Auckland to its southern neighbour. Hamilton's average home values rose by 10.2 per cent in the three months to October, pushing the figure to $429,829.

This is a stellar performance and gives sharp-eyed buyers plenty of reasons to scoop up residential investment property in Hamilton.

But where exactly in Hamilton shows this stark growth and potential? Surely some areas are struggling to merit house-buyer attention like that awkward kid at school?

Not true.

QV's residential index reveals that home-value increases have been witnessed all across the board. The north east, central and north west, south east and south west regions all boasted year-on-year value rises between 17 to 18.9 per cent in October.

This highlights the soaring popularity of the city, as well as the immense capital gains you could make in the future by buying in now.

Rents going up

Most of the city's suburbs experienced a rise in median rent.

Obviously, potential for residential property investment can't be spotted just by observing price growth; changes in rents must be watched carefully, too. Rising rental rates indicate a high demand from tenants.

In this field, Hamilton seems to be boasting positive results.

QV's rental analysis shows that most of the city's suburbs experienced a rise in median rent. Fairfield took the crown as it recorded an impressive 16.1 per cent increase in the year to October, pushing it to $360 per week.

Hamilton East came second with a year-on-year rent change of 10.9 per cent and median rent price of $255 per week. With Waikato University within a stone's throw from this suburb, you can expect demand for real estate here to remain strong.

Why Hamilton

Hamilton is a great city that offers a promising alternative to living in Auckland without actually being too far from home.

There are two compelling reasons why your investment property in Hamilton should have little trouble finding tenants. Firstly, it's a comfortable and charming city that's experiencing rapid development as more and more people settle in the area. Not to mention it offers a university with world-class departments listed in the global top 200, as rated by QS rankings.

Secondly, it's within short reach of Auckland.

An October 12 release by the Real Estate Institute of New Zealand (REINZ) talked about how areas surrounding Auckland like Northland and Waikato/Bay of Plenty have seen spikes in price growth. This has been attributed to the simple fact that people want to be near to New Zealand's most metropolitan city, but can't necessarily afford to live in it.

In that same vein, Hamilton is a great city that offers a promising alternative to living in Auckland without actually being too far from home. A short one hour and a half drive is all that separates these two cities.

So if you're thinking of buying a residential investment property outside of Auckland, it's hard to look further than Hamilton.

Here's to your financial independence!

Daniel Carney
Authorised Financial Adviser / Investment Property Expert

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