Hamilton real estate market
Hamilton real estate market: 5 market factors
characterise last 6 months of 2017
Lodge Real Estate’s managing director Jeremy O’Rourke says five distinct market factors will characterise the last half of 2017 in the Hamilton residential property scene.
“We’re half way through 2017 and we’ve seen a marked difference in Hamilton’s residential property market this year as compared to the past two years. The frenetic activity we’ve experienced is over for now and the city’s home sales activity is easing into more of what we would term as a normal market rhythm.
“Our team has had a look at historic trends and coupled these with activity, demand and supply factors evident through the first half of the year. Using that data, we predict five distinct market factors will impact the next six months within the Hamilton residential property market,” he says.
Factor 1: High demand for bare city sections and high-end homes
“Two types of Hamilton properties that will continue fetching top dollar and seeing fierce competition through to the end of the year are bare sections within the central city as well as high-end family homes.
“These properties continue to see multiple bidders intensely competing as they come on market. All signs point to these two types of properties continuing to demand top dollar as we move into the last half of the year,” says O’Rourke.
Factor 2: Side-lining of demand
“The Reserve Bank’s loan-to-value (LVR) restrictions on property investors coupled with the big four Australian banks turning off the lending tap has served to side-line buyer demand. We predict buyers will continue to see the noose tighten on lending as we ease into the last half of the year.
“For those who can access funds, this creates a fantastic opportunity for the savvy buyer to act now.
“The risk we see, however, and what historic trends show is that buyers and sellers will be poised and ready to move when lending restrictions relax. And when they move, they all move together which will create another market surge. However, this surge is unlikely to happen in 2017,” O’Rourke explains.
Factor 3: Rental supply at critically low levels
“Our city’s rental supply is sitting at critically low levels and unfortunately we predict there is no good news for those looking to rent within the next six months.
“We manage a large portion of the city’s rental properties and we currently have less than a one percent (1%) vacancy rate. We are signing new lease agreements for our rental properties even before vacating tenants move out. Unfortunately, LVR restrictions are the key factor driving a lack of supply and we will see very few new rentals coming available in the near term,” he says.
Factor 4: Elections will further dampen activity
“The years we have General Elections always see a hesitancy in the market and we predict the same will be true this year. Buyers and sellers alike will normally wait to list or buy properties until after the elections when there is certainty around the governing party and its policies.
“During August and September, we predict buyer and seller activity in the Hamilton market will dampen even further than current levels,” he says.
Factor 5: Immigration a key factor in price pressure
“Even with the market slowing down this year, the vast majority of Hamilton homeowners can remain confident that their homes will retain their values. That’s because residential demand is steady, and this is largely due to increased inter-city and foreign immigration.
“This sustained demand is the key factor why I won’t be surprised if Hamilton’s median house price outpaces the New Zealand median house price at some point within the next six months,” says O’Rourke.
The Real Estate Institute of NZ released its market data today showing Hamilton’s median house price fell from$534,500 in May to $515,000 in June. A total of 269 homes were sold in the city during June, as compared to 341 in June 2016. It is currently averaging 32 days to sell a home in Hamilton.
For the latest REINZ market data, visit www.reinz.co.nz.