Demand for real estate in Hamilton, driven in part by escaping Aucklanders, has spilled into the wider Waikato, with “spectacular” growth in towns like Morrinsville, Cambridge, Te Awamutu, Huntly and Ngaruawahia, say local agents.
The shape of Hamilton City is also changing fast - and upwards - with the council’s 50 per cent infill housing goal seeing high-density homes being built across suburbs. Apartment buildings are going up in the central city and along the Waikato River, while other buildings are being repurposed into residential.
Hamilton's average property value has risen 6.2 per cent in the last three months to $906,000 while Waikato's overall average property value has jumped the same amount to $958,000.
Price surges saw the city record its first $1m suburb late last year (Flagstaff in Hamilton’s North East), followed by another half dozen since.
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Jeremy O’Rourke, managing director of Lodge Real Estate, says prices plateaued from February for about six months then soared to new heights.
Along with Aucklanders moving to the Waikato, he says investors and expats have also contributed to price surges.
There has also been strong interest from ex-Hamiltonians returning to raise families – but O’Rourke says the city they are coming back to is vastly different from the one they left behind.
“There is more vibrancy about the city and newer developments reshaping the face of Hamilton. However, it still retains ease of access to recreation pursuits, either within or on the edge of the city itself, which is a key reason for their shift.”
Lack of stock is a problem – the number of properties available has been less than 500 all year, which is just over one month’s usual sales, he says.
But there is a lot more on offer in terms of different living arrangements.
“Infill housing, such as duplexes, townhouses and apartments, have becomes popular, as have modern houses on much smaller footprint of land.
“With more developments coming online, we expect this will assist in meeting the increase in demand in the near future.”
Lodge Real Estate is selling luxury apartments at the One Cook St development in Hamilton East which will have views north of the Waikato River and a starting price tag of $2.365m.
Hamilton’s average property value is nearing the $1m mark. Photo / Getty Images
O’Rourke says early inquiries have been strong, and he expects strong levels of inquiry for seven sections at Eighteen 76 River Road in Flagstaff when they are released to the market.
“It will be interesting to see where buyers price them as there are currently very few sections for sale in this high-demand suburb in the northeast of Hamilton.”
Much more development is underway or planned for Hamilton and the surrounds, too, such as Te Awa Lakes, a 62-hectare mixed use residential development waiting on consent and located at a former quarry which is bordered by the Waikato River and the Expressway.
One of the biggest changes both O’Rourke and Fraser Coombes, Ray White Hamilton’s general manager, have seen over the past 12 months is investor behaviour.
Each time the Government has intervened with rule changes investor interest quietened but once investors digested the changes they came back, says O’Rourke.
The difference is they have rotated out of the older properties they owned and are reinvesting in new builds.
The planned Te Awa Lakes development. Photo / Supplied
Coombes agrees, saying the removal of interest deductability for rental properties has seen investors buying off plans but potentially those selling up their older properties are leaving the door open for first home buyers.
Other options for first home buyers include Ngaruawahia and other fringe towns which have become popular with those who want a new property but can't necessarily afford the prices being seen in Hamilton City.
Ngaruawahia is an example of a small town which has had subdivisions over recent years where people can still buy a lovely home for $1m or just under and commute to Hamilton, Coombes says.
Hamilton City itself is maturing, and another year of Covid and lockdowns have taught that life goes on – families grow and upsize and downsize and people still move around.
Coombes has seen people investing in their properties as they spend more time at home. This, and the limited stock on offer, has fed into the price growth seen over the last 12 months.
But people exiting Auckland is really fuelling the demand because property is still cheaper to the south. There is a great lifestyle to be had with bushwalks while the Coromandel or Raglan are easily reachable.
“In saying that, with 25 to 27 per cent price growth in the year for Hamilton what you could buy a year ago obviously you won't get that same property today.
“But Covid aside, with the new roading you’re in Auckland in an hour and a half anyway. Hamilton really is maturing and it’s getting a lot of interest, a lot of growth.”
Coombes expects even more interest from Aucklanders suffering from lockdown fatigue.
He expects further price growth next year and says demand won’t slow: “If we had more we’d sell more - that’s the way it is at the moment.”
