Fleeing Jafas put pressure on property
Demand is up for entry-level houses in the Waikato as first-home buyers take advantage of low interest rates, KiwiSaver deposits and Housing New Zealand subsidies.
A combination of population growth and buyers bailing out of Auckland's increasingly heated property market is proving a boon to Waikato towns, but agents are raising fears that a lack of houses may soon push prices up.
Lugton's managing director, David Lugton, said Hamilton's property market was "bubbling along" but he was unsure whether Hamilton had the housing stock to meet future demand.
"It will be interesting to see if the supply of housing is going to meet the demand. It could be an increasing concern as we move through into the next couple of years."
Real Estate Institute figures show 799 homes sold in the Waikato-Bay of Plenty area in September, up from 694 in September last year.
Of those, 196 houses were sold in Hamilton city, up from 163 on the same period last year, while Waikato itself recorded 149 sales, up from 134.
At Lugton's auction rooms, multiple bidders are vying for houses selling for more than their value. With more buyers, Mr Lugton expects prices to rise.
"There is only [one] way it can affect it and that will be a move upwards," Mr Lugton said.
The average house in the region went for $310,500 in September, up $5500 from August and $300,000 in the same period in 2011.
Out-of-town buyers were adding to the number of local property hunters, Mr Lugton said, while investors were crunching the numbers and taking the opportunity to strike. Low interest rates and rising wages have pushed Waikato home affordability up 12.8 per cent over the past 12 months, well up on the 4.9 per cent national average and the biggest increase in the country with Otago.
Statistics New Zealand projections released this week show a 1.3 per cent population increase in Hamilton and a 1.1 per cent increase in the wider Waikato.
The regions are experiencing a similar heated trend, with increasing multiple offers on properties being reported.
Harveys Tokoroa agent Barbara McMullen said she had noticed more people moving back to the town.
"We have got about three inquiries from Auckland people who were brought up in Tokoroa . . . who have gone off to have their children and have decided to come back."
She said there was a shortage of housing stock at $300,000 and she had recently sold some properties in that range, with much of the interest coming from out of town.
Ngaruawahia was experiencing similar demand, Century 21 sales manager Paula Jelaca said.
Houses tended to be cheaper than in Hamilton and investors were at an advantage as rents were on par with the city, she said.
In Te Awamutu, Ray White principal Gregg Tickelpenny said investors were starting to return to the market as investor portfolios felt the squeeze of a low rate of return.
The stock position was tight but volumes had increased in the past three months, he said.
- © Fairfax NZ News