First home buyers drive suburb growth
Residential property prices across most of Hamilton’s suburbs are rising, with one increasing by more than 3%, according to latest CoreLogic data.
However, Lodge Real Estate’s managing director Jeremy O’Rourke said the increase may have been driven by a shortage of stock.
CoreLogic’s interactive tool Mapping the Market revealed the median property values of 32 suburbs have risen since November, with Deanwell, Silverdale and Glenview increasing by 2% or more.
Fitzroy lead the pack with a 3.5% increase, putting the suburb’s median value at $742,300 as of February this year. But O’Rourke said it was difficult to determine a trend for the suburb as it was “particularly small”.
“Because we were seeing a shortage of stock we did see probably a slight increase in prices through those areas during that time and they were probably areas that had suffered previously from the downturn.
“Prices pulled back quite significantly in all of those suburbs since the start of 2023 and mid 2023... And then we saw a slight recovery through that period so that would ring true.” During that time frame there were about 650 properties on the market, O’Rourke said.
“What’s happened since then, from this morning [Thursday] there’s about 967 properties. So what we’re now seeing is we saw those gains but because we’ve seen so many properties enter the market and particularly in the price range that those suburbs represent.. we’re now seeing those prices either hold steady or just come back a little bit.”
First home buyers were busy at the moment but the market “is still devoid of any real investor volume”, he said.
According to CoreLogic, Deanwell increased by 2%, taking its median value to $633,350, Silverdale’s 2.1% put its value at $729,250, with Glenview now sitting at $747.050 after a 2.9% increase since November.
On the flipside, Tamahere’s median value decreased by 0.3%, taking it to $916,050. Other suburbs to experience a decrease were Frankton at 0.1%, making its value $627,450 and Dinsdale at $799,950 with 0.4%. At $1.14m, Harrowfield remained the city’s most expensive suburb, while Bader the cheapest at $593,100. Median values fell yearon-year, although six suburbs managed to rise, including gains of 1% or more in Rototuna, Silverdale, and Harrowfield.
Earlier this month its Chief Property Economist, Kelvin Davidson warned recent muted house price figures showed it wouldn’t be a linear market recovery.
“Given that mortgage rates remain high and property sales volumes through January remained at near record lows, buyers and sellers are still taking their time and this is flowing through to more subdued value growth.“
"For new entrants to the housing market, there are still significant challenges in terms of saving the deposit and satisfying loan serviceability criteria. Investors are also facing challenges from high mortgage rates too, while even existing owner-occupiers looking to move up the ladder still need to assess their finances closely. While the official cash rate remains on hold for now, the risk of a further rise in the short term hasn't dissipated altogether, and the likelihood of official cash rate cuts aren't on the table for the foreseeable future either, he said.
“This will mean shorter-term fixed mortgage rates, such as the one and two year loans, could remain elevated for a while yet.” Last week the Reserve Bank held the official cash rate at 5.5%.
“As a result, we could continue to see mixed results across the housing market, with localised factors affecting each region and stretched affordability continuing to restrict growth in property demand and therefore price growth too,” he said.