$1m homes Waikato’s ‘new normal’
‘‘I think it’s something we’re getting used to. Section prices aren’t dropping in a hurry and building prices are getting more expensive.’’
Lodge Real Estate managing director Jeremy O’Rourke
Million-dollar homes are the new normal in the Waikato.
Real estate agents say land prices and new builds are behind the trend that saw a 20 per cent jump in the region’s million-dollar home sales year on year.
‘‘There are a lot of sections in Hamilton being sold well into $400k,’’ Lugton’s managing director Simon Lugton said.
‘‘Then you build a new house for around $600k – four bedrooms, two bathrooms – and that takes it over a million.
‘‘Unless land prices come back, I think [million dollar house prices are] probably here to stay.
‘‘I think it will be the new normal.’’
There were 267 million-dollar homes sold in 2017, a 19.7 per cent increase from 2016’s 223, according Real Estate Institute of New Zealand figures released yesterday.
Lugton added that house prices throughout 2017 had been flat, so it didn’t indicate prices were increasing in the region.
‘‘It’s possibly just some of those houses started getting built in 2016/2017 and now they’ve sold and been quite well represented across the market.’’
Lodge Real Estate managing director Jeremy O’Rourke said he saw a lot of million-dollar homes sold through the firm’s auction rooms.
‘‘I think it’s something we’re getting used to. Section prices aren’t dropping in a hurry and building prices are getting more expensive.’’
It’s also a sign Hamilton is maturing as a city and people are looking to settle down in the region, he said.
‘‘An underlying point is there is also a real confidence in Hamilton and the Waikato in general.
‘‘It is drawing more and more people for employment and businesses are expanding. There’s a confidence in the community.’’
By comparison, the number of million dollar-plus sales in Auckland fell by almost 18 per cent.
O’Rourke said people are still moving down from Auckland, but it wasn’t the big surge it was a few years ago.
‘‘We’ve had good interest from buyers shifting from Auckland, not only in Hamilton but certainly throughout Cambridge and the surrounding areas.’’
He said the Waikato was closing the gap with Auckland house prices, but is still a way off.
‘‘We’ve seen for some time now the growing gap between Waikato and Auckland homes [prices]. Auckland went a little bit too far and blew apart wider than we’ve ever seen before, and now they’re coming down and we’re playing catch-up.
‘‘We’ve lagged a bit behind Tauranga and Auckland and I think people are starting to recognise the real value of Hamilton.
‘‘And there are many people who want to enjoy the lifestyle [and] living comfort that houses over a million dollars bring.’’
Other regions that saw an increase were Hawke’s Bay (58 per cent), Tasman (52 per cent) and Gisborne (33 per cent), though the numbers of actual sales were much smaller, magnifying the percentage increase.
Southland had the largest increase year on year at 200 per cent increase.
However, it went from one million-dollar property sold in 2016 to three properties in 2017.
The regions with the largest decrease of million-dollar homes sold were Manawatu/Whanganui (-36.8 per cent), Marlborough (-26.7 per cent) and Northland (-23.3 per cent).