Shortage reshapes Hamilton market

Friday 17 August 2018

Not so long ago Hamilton was one of the stars of the boom market, but now the country’s fourth largest city is adjusting to a new normal.

By Miriam Bell

Current talk might be all about Auckland’s flat-lining price growth, but this week’s Real Estate Institute of NZ (REINZ) data suggests Hamilton is following in the Super City’s footsteps.

Like Auckland, Hamilton saw strong double digit house price growth for a sustained period at the height of the current property cycle.

But the REINZ data highlights just how much Hamilton’s price growth has fallen off that pace.

Back in June, Hamilton’s median house price hit a 2018 high of $560,000. In the July data, it had slipped back to $525,000.

That’s a drop of 6.3% from June – but it is also down by 0.9% on the city’s median price of $530,000 in July last year.

Lodge Real Estate managing director Jeremy O’Rourke, says the shortage of quality stock at the top end of the market, and thus fewer sales at the top end, has shifted the city’s median.

“We’ve been saying for months that the Hamilton market is experiencing an incredibly short supply of quality homes for sale.

“It’s like a drought in a dry land at the moment – those of us who have been in the industry for many years have never seen stocks so lean.”

Lodge says that, despite the shortage, buyer demand is not easing so there does continue to be some upward pressure on house prices throughout the city.

“But homes which are over-priced are being ignored by buyers and can stay on the market for quite a long time.”

Meanwhile, the latest QV data on the Hamilton market also supports the view that prices are stabilising – and re-setting the market.

It shows that Hamilton’s values rose by 0.8% over the past quarter and by 3.3% in the year to July, leaving the city’s average value at $558,615.

QV’s Hamilton consultant, Andrew Jaques, says they are continuing to see steady growth rates across most areas although the rate of growth has dropped compared to this time last year.

“Entry-level property, below approximately $500,000, continues to attract plenty of demand from first home buyers.”

But, much as in Auckland, they are also seeing increased demand for property in Waikato’s outer suburbs, like Paeroa and Ngatea, he adds.

“That is as prospective buyers seek out more affordable property still within a commutable distance to Hamilton, Tauranga and Auckland.”

Read more:

REINZ data suggests "buyers market" in Auckland

Strength in lower-end of market

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