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Bayleys Research


HAMILTON RESIDENTIAL REPORT 2008

APRIL 2008

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OVERVIEW

Hamilton City’s population growth in recent years has been one of the fundamental drivers for housing demand in New Zealand’s fourth largest urban centre. This trend looks set to continue with Statistics New Zealand’s (StatsNZ) latest population estimates showing that by 2031 Hamilton City’s population will be approximately 178,000, an increase of 32% from 2006.

The demand for housing has fuelled the residential property market in Hamilton, which has experienced strong increases in median sale price over the last few years. As can be seen by the table below the median sale price of residential dwellings in Hamilton City for the December 2002 quarter was at $160,000 compared to $335,000 just five years later, according to the latest statistics from the Real Estate Institute of New Zealand (REINZ). This represents a substantial increase of $175,000 or 109%.

 

 

The New Zealand residential property market entered a strong period of price growth between 2002 and 2005, which is also reflected in the Hamilton City residential property market. However, recent results indicate the significant levels of price growth achieved over recent years have now contracted in line with the rest of New Zealand. The December 2007 quarter median sale price increased by 6% compared to the same period last year.

Median sale price indications for Hamilton City in 2008 show further contraction, with the actual sales reported to REINZ for January 2008 recording a median sale price of $327,000. This is just higher than the $315,000 recorded for January 2007, representing an increase of just 4%, but compared to the September high of $365,000 it is a -10% correction in the market and possibly an early insight into the 2008 market conditions with values flattening out and possibly dropping by a modest amount in some areas. Anecdotal evidence from the market so far this year suggests that a number of vendors are dropping their asking prices in order to achieve a sale.

 

 

While sales volumes for Hamilton City made a slight come back in the latest December 2007 quarter, the 808 sales recorded is still historically low for the region. This reduced number of sales is typical of residential dwelling sales volume for New Zealand as well, which has also weakened in recent months.

In tandem with the slow down in sales has been the extended time it now takes to sell a dwelling. The average days on market figure of 53 is well above the 30 days recorded between the end of 2003 and 2005.

 

 

As illustrated on the reverse page, the distribution of sales by $100,000 price brackets, residential property in Hamilton City has shifted upwards in price over the last seven years. Closer analysis reveals that in 2007, the majority of sales were sold between the $300,001 and $400,000 range compared to the $100,001 and $200,000 range.

At the top end of the market, in 2000 there were four sales recorded above half a million dollars, but in 2007 there were 384 sales, representing just under a quarter of the total sales for Hamilton City.

 

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