As Hamilton's median house price is tipped to break the $600,000 barrier, deputy mayor Martin Gallagher has warned that the city council must use all its tools to offer the same deal for millennials, as baby boomers had, or face a backlash.
Mr Gallagher was speaking in response to a Lodge Real Estate warning of rising house prices.
"We face a situation where the children and grandchildren of the baby boomers will be worse off economically," Mr Gallagher said. "As a country and a city we must as a government do our bit towards assisting young people into their first home."
Lodge Real Estate warned last week that Hamilton is running low on available houses.
Managing director Jeremy O'Rourke said the dramatic decrease in the number of homes listed for sale in the city is keeping upward pressure on house prices in the city.
"Three hundred and six homes were sold in Hamilton during May, however that stock was not replenished at the same rate through new listings. At this level of demand, a market in equilibrium — meaning not favouring either buyers or sellers — would have around three months of stock available for sale, which is around 900 homes," Mr O'Rourke said.
"However, at the start of June there were only 716 homes listed for sale. And this is a dramatic decrease when compared to the past few months. For instance, at the start of March there were 792 homes available for sale in Hamilton. While at the start of April there were 793 and at start of May there were 783."
Four Hamilton Special Housing Areas have currently been approved by the city council and now sit with Minister of Housing and Urban Development Phil Twyford. These are Te Awa
Lakes, Rotokauri, Gilbass Avenue, and Eagle Way. If these areas are approved by the minister there will be more than 2000 dwellings in the pipeline for Hamilton.
Each SHA is expected to have 40 per cent of affordable dwellings within it, priced under the median house price.
Peacocke suburban development was also signed off under the 10-year plan which Mr Gallagher called a game changer for Hamilton.
"People who are opposing Peacocke, imagine the prices if council had not proposed with developing Flagstaff and Rototuna," Mr Gallagher said.
"That is going to be the challenge. It is an issue of supply, but it doesn't necessarily mean
Peacocke will have the first houses. As we saw with Flagstaff and Rototuna, as people move into their second or third home, people open up homes elsewhere."
He also said council needs to look at inner city apartments to provide homes as soon as possible. If demand continues to outstrip supply, Hamilton could see its median house price break through the $600,000 barrier.
"While predicting a record median isn't an exact science, it's looking probable that the city will experience a median near the $600,000 mark within the next six months," says Mr O'Rourke.
Total value of home sales within Hamilton city during May was $183,427,682 — up from $144,225,550 during April. The median listing price during the month was $524,000 compared to the median sale price of $542,000. The median government value of homes sold in Hamilton during the month of May was $405,000.