Sue Hall

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"Just wanted to thank you for making the sale of 53 Carrington Avenue so seamless and stressless. My only regret is that we haven't actually met you yet! But we will make sure to come over and do that before long. Anyway, thanks again for all your great work on our behalf. "

- Trevor & Pauline

" Sue Hall You've done it again Sue! Sold another home for us in a very professional manner, kept us informed throughout the process and done so in a caring way. We couldn't have asked for more. Thank you Sue!! "

- Sonny and Eileen
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Economists Weigh in on the State of the Hamilton Property Market

13th Jul 17

What are the economists saying about Hamilton's real estate market?  We’ve reviewed the commentaries from the Hamilton City Council, REINZ, CoreLogic, QV and www.interest.co.nz to create one neat bundle of digestible key points for property investors to take away.

 

We’re still in a property boom period

Since 2015, the Hamilton property market has gone through unprecedented growth.  According to a report from Hamilton City Council, both property prices and the number of new dwellings going up are at an all time high.  In fact, REINZ data shows that it’s not just Hamilton, but the whole Waikato region.


House prices are up

Hamilton is well known as a property hot spot and recent reports have only confirmed that Hamilton’s growth is well above the national average.  Hamilton City Council found that from March 2016 to February 2017, Hamilton experienced a 17% increase in average house prices, now coming in at $532,171.  As of April, this is sitting at $532,500.

Want to see the monthly data?  Get my latest Hamilton Residential Market Report.

REINZ Regional Director Phillip Searle, believes the Hamilton market is still very buoyant, with the high demand for housing keeping prices in the $500k to $800k price bracket.  However, some parts of the Waikato region are seeing more buyer resistance to vendor pricing, evidence of the tougher lending restrictions that have reduced demand.

That’s not to say the Waikato region is doing poorly.  In fact, it’s just the opposite.  As a whole, house prices are continuing their strong rise across the Waikato region. In April, REINZ found the average price was $489,000, a 22.3 % increase from last year.  The most notable growth areas were Hauraki, South Waikato and Matamata-Piako; year on year they have risen 50%, 41.9% and 39.3% respectively since April 2016.

New dwellings are growing

The number of new dwellings in Hamilton is set to increase with the recent approvals of 1,196 new residential dwellings (of all types), in 2016.  What’s more, the number of building consents appears to have risen from between 40 and 50 per month to an average of 70.  However, Hamilton City Council has indicated that the number of new build approvals is levelling due to the new LVR's, increased land prices and labour shortages - So no further increases are expected.

 

The most affordable North Island city

Housing affordability is a major issue across New Zealand, especially since salaries and wages haven’t scaled with the rising house prices.  While Hamilton is not immune from the the issue, QV data shows it is still more affordable than Auckland, Wellington and Tauranga.  In fact, according to the Hamilton City Council, Hamilton is the most affordable major city on the North Island.

 

Want to know more? Here’s a Hamilton Home Loan Affordability Report.

 

The drop in sales activity explained

While house prices and the numnber of new dwellings are up, sales in Hamilton and across the Waikato are significantly down compared to a year ago.  As many economists have noted, this is largely due to the impact of the new LVR's and in part, rising interest rates.

“While the Reserve Bank has kept the official cash rate at record low levels, fixed term mortgage interest rates have risen this year,” writes Jonno Ingerson, Head of Research at CoreLogic NZ.  “This reflects the higher cost of money that the banks need to source offshore to fund their mortgage lending.”

Seasonal trends have also played a role in the sales dip.  Sales in January were quiet as usual and then Easter, ANZAC Day and school holidays all falling into April, led to a drop in property sales that was felt not only in Hamilton, but nationwide.

 

Buyers are still confident

Despite all the uncertainty surrounding the New Zealand housing market, confidence is still high in Hamilton - Both for residential and commercial property.  A Collier’s survey found Hamilton’s residential confidence at 59%, the second highest in the country behind Queenstown.

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Filed under Hamilton / Waikato \ Real Estate

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