The Labour-led Government’s plan to stop overseas buyers purchasing homes is unlikely to affect Hamilton’s housing market, according to Lodge Real Estate’s managing director Jeremy O’Rourke.
He says Hamilton’s housing market is strongly driven by other New Zealanders – particularly from Auckland – migrating to the city.
“We rarely see foreign-based buyers looking to buy up residential homes in Hamilton. The foreign factor is something that’s primarily affecting the Auckland housing market with overseas buyers snapping up investment properties to rent. But we just don’t see much demand in Hamilton,” said Mr O’Rourke.
Prime Minister Jacinda Ardern announced on October 25 while speaking at the Council of Trade Unions conference in Wellington that a bill to stop foreign buyers from purchasing existing homes would be introduced by Christmas.
“A key factor that continues to affect the Hamilton market is the continued migration of new residents into the city. Over the past few years we’ve seen a steady increase of both New Zealand-born and foreign-born citizens and permanent residents moving their families to Hamilton. Many of them are exiting Auckland and choosing Hamilton for its preferred lifestyle options.
“As we’ve been saying throughout 2017, this migration into Hamilton has put upward pressure on house prices in the city. We don’t see Hamilton’s median house price easing off significantly anytime soon,” said Mr O’Rourke.
Lugton Real Estate director Simon Lugton said a ban on overseas buyers may have a little bit of impact in Hamilton, although Auckland would obviously be more affected.
“It’s hard to put an estimate on the number of overseas buyers involved in Hamilton. Before that announcement we had seen a bit of a slow down anyway, possibly because Hamilton was seen as topping out in terms of prices as far as an investment goes anyway.”
Mr Lugton said restrictions on loan to value ratios (LVR) had put a brake on investors generally although it has opened up the market more for first home buyers.
The Real Estate Institute of New Zealand’s monthly figures show Hamilton’s median house price for October 2017 increased to $535,000 from $533,000 in September 2017. This compares with a median of $518,000 in October 2016.
Mr O’Rourke said the number of homes sold in Hamilton during October was low with just 237 sold, which compares with 278 sales in October 2016.
However, he said the number of homes being listed on the market increased significantly during the month.
“On October 1 there were 698 homes listed for sale in Hamilton. By October 31, there were 780 homes for sale throughout the city.
“A lot of homes being listed in Hamilton are by families who are rotating into another property in the city,” he said.
“Buyer inquiries have steadily increased following the slow period we experienced leading up to the election. We anticipate the market will strengthen over the coming months as we head into summer.”
Mr Lugton said the market was getting into the late spring/early Christmas “boom time” in terms of growth in the number of listings.
“October is always a bit slow with school holidays but the growth in listings will translate to a good number of sales in November.”
He said prices had been pretty stable in Hamilton all year.