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Hamilton house prices and listings skyrocket, buyers show urgency - Lodge Real Estate

Contributor:
Fuseworks Media
Fuseworks Media

Hamilton’s residential property market is heading toward normal, says Lodge Real Estate’s managing director Jeremy O’Rourke.

The Real Estate Institute of New Zealand (REINZ) released residential market statistics yesterday showing Hamilton’s median house price has skyrocketed to $645,000 from $636,100 in April and $580,000 in May 2019. The number of house sales in the city was 184 for May, compared to just 34 in April which also points to signs of market recovery. However, sales were a far cry from May 2019 when 336 homes were sold in the city.

"While total sales across Hamilton were abysmal during April and early May, sellers have been fast to list homes over the past month and sales are increasing week by week. This is a positive sign that normality may not be too far away."

O’Rourke says each day since 27 April, when Alert Level 3 came into force, Lodge has had at least one home sale in competition with several buyers.

"Plus the top end of the market has been incredibly buoyant. Over the past month the city has seen a Hamilton lake home sell for $3.2 million, a riverside home sell for $2.5 million, a Flagstaff house sell for $1.77 million and many others going over the one million dollar mark.

"Buyers are very active and there is a sense of urgency. People likely had plans to buy, sell and move during the second quarter of the year but the pandemic put the brakes on their plans. But as we’ve moved through the alert levels, with that has come urgency to buy. And with the number of homes currently available for sale in the city at an all-time low, that means buyer competition is keeping prices steady and strong," explains O’Rourke.

In contrast, O’Rourke says some homes that were on the market pre-lockdown are experiencing slow interest. He says it is primarily the newer listings garnering most buyer attention.

"We are currently seeing a lot of interest from first home buyers and that’s because there’s a perfect combination of factors, including incredibly low interest rates and Kiwisaver investments that have recovered after an initial market decline. Seeing the dips in Kiwisavers earlier this year is creating urgency with first home buyers to use their nest eggs now rather than risking another decline if markets experience another sharp fall."

O’Rourke says investors are active in the market with many looking to add to their rental portfolios. He says this is welcomed news as the number of homes available for rent in Hamilton is incredibly low.

"In our portfolio of 3200 rental properties under management, only seven houses are currently available for rent in Hamilton. So, families have very few rental choices in the city."

While weekly rents have held steady with Government-mandated freezes in force over the past few months, O’Rourke says Hamilton should brace for inevitable rent rises.

"Weekly rental rates are holding steady but there is pressure on them to rise. Rent inflation is setting into the market and as rentals become vacant when people move, landlords will take that opportunity to put rents up. Because there’s huge demand for rentals, higher rates are not deterring people.

"The strong activity in the residential property market is a signal that Hamilton and Waikato is in a strong position to weather the economic impact of Covid-19 and will likely bounce back faster than other urban centres."

For more information, see www.reinz.co.nz and https://www.lodge.co.nz/News.

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