Published on: 2017-11-21

Proposed Government restrictions on foreign buyers unlikely to impact Hamilton housing market

Proposed Government restrictions on foreign buyers unlikely to impact Hamilton housing market

Lodge Real Estate’s managing director Jeremy O’Rourke says the Labour-led Government’s proposed move to stop overseas buyers from purchasing existing homes in New Zealand is unlikely to affect the Hamilton housing market if it goes ahead.

“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 from foreign buyers in Hamilton,” said Mr O’Rourke.

Prime Minister Jacinda Ardern announced on 25 October 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,” explained Mr O’Rourke.

The Real Estate Institute of New Zealand (REINZ) released its monthly figures today which show Hamilton’s median house price for October 2017 was $535000.  This compares to a median of $518000 in October 2016.

O’Rourke said the number of homes sold in Hamilton during October was low with just 237 sold, which compares to 278 sales in October 2016.
However, he said the number of homes being listed on the market increased significantly during the month.

“On 1 October there were 698 homes listed for sale in Hamilton.  By 31 October, 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 enquiries have steadily increased following the slow period we experienced leading up to the elections.  We anticipate the market will strengthen over the coming months as we head into summer,” said O’Rourke.

For the latest REINZ market data for Hamilton, visit www.reinz.co.nz.