July 2023

The Hamilton residential property market continues to feel the effects of constrained listings coupled with a ‘wait and see’ attitude from both buyers and sellers which may linger until after the October general election.

Lodge Real Estate Managing Director Jeremy O’Rourke says there are six key variables impacting the Hamilton property market, which is triggering caution among buyers and vendors alike. These include limited stock, potential Government policy changes, investor inactivity, interest rate uncertainty and the impacts of both immigration and emigration.

“The most immediate variable impacting Hamilton’s market is that prices are still under pressure to rise due to the limited housing stock we have available in the city. The number of homes for sale in Hamilton at the beginning of August was sitting at around 640, a big drop from the figures in April and May which were in excess of 900.”

While historically listings dip each winter, this July was especially quiet and could point to the uncertainty the market is feeling as we head into the general election, says Jeremy.

“Buyers will be looking to see what policy changes will be coming. Plus, we may see the return of investors back into the market, a group that has been largely absent due to interest rates rising, the lack of deductibility, and an increased Brightline test.

“We’re also seeing people emigrate, moving to greener pastures, with Australia being the most obvious choice. So, while there is currently demand in the market, that could swing the other way entirely if there’s a mass exodus post-election. Conversely, immigration into the country, and specifically into Hamilton, does remain strong. So, that will help to balance any population exits.”

Jeremy says that while housing demand in Hamilton remains steady, the city is unlikely to see a positive impact on various market indicators, including any price rises, for about three months’ time.

“What typically happens just before prices start to rise, is we start getting surprised by what individual properties are selling for, which is what we are seeing now. So, that’s a positive, early indicator of change that could be coming for the Hamilton market. There’s every indication now that in three months’ time we could see house medians and averages start to rise.”

However, he says the months preceding the election will continue to bear some uncertainty, particularly as housing supply remains constrained with vendors holding tight.

“So, it’s a case of waiting and seeing just which variables will play out in order to gather some certainty toward the end of the year.”