Many segments of the residential property market are still performing strongly in Hamilton. Despite overall sales volumes for March being approximately 25% less than March 2021, one Hamilton real estate agent is reminding people that residential property is not a commodity market.
Lodge Real Estate Director, Jeremy O’Rourke, says people need to remember the housing market is comprised of diverse segments and many are still performing very well.
“When you listen to commentators talking about the downturn in the overall housing market across New Zealand, you might conclude it’s all doom and gloom. But what many people don’t realise is housing is not a commodity market. There are many different segments within the market including lifestyle blocks, character homes, entry-level homes, investment properties, townhouses, duplexes and more.
“When you analyse the market in this way, we are finding at a micro economic level there are still many segments attracting strong buyer interest and performing well. Lifestyle properties and character homes are two that remain especially strong in Hamilton,” he says.
O'Rourke says there has been downward pressure on prices in segments of the housing market which have been diluted with stock. The townhouse market is one case in point.
“We've seen prices on Hamilton townhouses retreat anywhere from 2% to 6% in recent months. This has left some mum and pop investors struggling to realise any real margins on finished builds.
“That’s because many of these investors paid a premium for land to build their townhouse developments when the market was at its peak a few years ago. As townhouse prices decrease, investors’ margins are considerably less than they would have budgeted on,” says Jeremy.
O’Rourke says the Hamilton economy remains strong and that means the housing market will remain resilient, despite mass ‘commodity’ market numbers waning.
“As the Omicron wave passes, Hamilton businesses are preparing to take off again and people are moving back into offices for work. We have a strong economy driving jobs and population growth and those two factors will drive a strong housing market. The city is an incredibly attractive market to buyers,” says Jeremy.
Considerable housing, commercial and industrial developments are underway around the city, which are also contributing to strong buyer demand. As the Credit Contracts and Consumer Finance Act rules relax in the short-term, this will further help to free up finance for many looking to buy, says Jeremy.