Weekly rental rates for units in Wagga have skyrocketed in the last 12 months to hit a 10-year high.
The latest SQM data shows that as of this week the average weekly rent has increased by 16.3 per cent for a two-bedroom unit and by 10.9 per cent for all other units over 12 months.
The median price for a two-bedroom unit in Wagga has climbed to $286 per week and to $297 for all other units.
LJ Hooker's senior property manager Robyn Rossiter said the increase is likely down to new developments and renovations being undertaken by investors.
"Investors want to get a good return and you're more likely to attract a better tenant when you renovate," she said.
She points to a block of units at 10 Edney Street currently undergoing a major renovation.
Ms Rossiter said once finished, the units will cost $250 per week. The typical asking price for units in the neighbourhood until now was $190 to $200.
"People are building that stuff because from an investment point of view they'll get more income from [multiple dwellings] and it is lower risk because if one tenant vacates, they'll have the other ones," she said.
Kitson Property property manager Belinda Humbert said she believes demand for units has jumped because of the COVID-induced rental squeeze.
"When COVID struck and everyone was desperate to secure a rental property, I think a lot of houses' rent skyrocketed into an unaffordable price bracket," Ms Humbert said.
"[That] encouraged people to decide if they needed such a big house, and if it would be less maintenance and cost if they were in a unit.
"In a unit they don't need to pay water or maintain yards, and although their prices increased dramatically it stayed in that median rent range."
Council's Director of Regional Activation Michael Keys said that with a shrinking availability of housing stock, more investment in units and high-density housing will be on the cards in the city's future.
"I think there is probably going to be, with the high demand for rental, a high demand for apartment-style increasing in the future," Mr Keys said.
"We haven't seen a real boom or uptake of apartments in the city yet, but there are in principle approvals and future opportunities in central areas that might come up.
"The feedback is the market is looking for it, we need to see a couple of those developments come on and be constructive."
While both real estate insiders agreed units have increased in popularity and will continue to do so, Ms Humbert said demand in Wagga is still largely focused on stand alone homes, particularly among those migrating from metro areas.
"They love the idea that they actually have space," she said.
"I've spoken to quite a few people recently who are planning to move here for work and they currently live in a townhouse and can't wait to have a yard, it's the appeal of this lifestyle."
Ms Rossiter agreed primary interest remains in houses, however predicted that to solve the shortage in lower price brackets, units are part of the answer.
"Population growth here is going to drive a need for affordable, two-bedroom, three bedroom places," she said. "The current rental market, particularly that low end, is very tough for renters."
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