Optimistic Outlook for 2011

At the end of 2009 there was an expectation from most market commentators that there would be a lift in Hamilton residential sales during 2010. However, exactly the opposite eventuated.

The table below graphically illustrates the market’s demise:

End of Nov 09 End of Nov 10 Movement
Sales 2392 1723 28%
Median Price $328,500 $324,000 $4,500
Median Days to Sell 33 49 +16 days
Estimated properties for sale 1155 1338 16%
Top 3 suburbs by volume Rototuna

Hillcrest

Nawton

Rototuna

Nawton

Hillcrest

# of mortgagee sales 97 65 33%

Although for much of 2010 we witnessed market conditions deteriorate October was the bottom. Since then we have seen a strong recovery in November followed by solid sales activity during December.

Our outlook for 2011 is for volumes to continue increasing throughout the year. Our reasoning is based on the following;

  • Hamilton’s population has maintained its growth up 1.7% for the year.
  • Rental demand for accommodation is consistent with some sectors lacking properties to rent. As tenants become frustrated with the lack of choice they can often turn their attention to purchasing.
  • Business activity has lifted and Hamilton businesses are producing good wins. A prime example being WEL Networks $300 million broadband build contract.
  • Providing the rain outside my window continues farmers will benefit from an increase of 30c per kg of milk solids taking the payout into the region of $730 – $7.40 before retentions.
  • Finally, the rugby world cup will add stimulus to the entire country. However, it could also attract immigration as scores of northern hemisphere tourists sample our unique lifestyle first hand.
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