Hamilton market comes off ‘fever pitch,’ fewer Auckland investors vying for homes
Hamilton, New Zealand – Lodge Real Estate's managing director Jeremy O'Rourke, today said October saw fewer Auckland investors in the Hamilton residential housing market which affected volumes sold.
"Just 375 homes were sold in Hamilton during the month of October, a sharp decrease from 463 sold in September. September was an unusually large month and it was expected that the market would return to a more sustainable number after such an aberration.
"However an additional factor contributing to this decrease is that we're seeing fewer Auckland investors in the local market. We suspect this is due to the new loan-to-value ratio limits coming into force in Auckland city," Mr O'Rourke explained.
Last month the Reserve Bank introduced new loan-to-value ratio (LVR) limits on lending to property investors in the Auckland Council area that require those borrowers to have a minimum of a 30 per cent deposit.
"Although the new LVR limits do not affect investors' borrowing limits for homes purchased in Hamilton, the new rule has caused these Auckland-based investors to take time out to think about how their investment portfolio plans are affected.
"The market has softened slightly – it has come off fever pitch. Basically, October has been a time of regrouping for many Auckland investors, however we suspect to see them progressively coming back into the Hamilton market again over the coming months," he explained.
Hamilton's October median selling price for residential properties hit another record at $435,000. This is up from $425,000 in September 2015 and $356,900 in October 2014.
The number of new homes being listed on the market continues to be strong with 490 new properties listed during October. As at 1 November, 671 homes were listed on the market compared to just 553 on 1 October.
"Strong listings coupled with fewer sales in October means buyers have greater choice as compared to the winter months. Buyers aren't as quick to snap up the first property they like. As buyers become less desperate, we expect prices will continue rising, but at a much slower rate," said Mr O'Rourke.
For the latest REINZ market data, visit www.reinz.co.nz.