Hamilton median house price nudges towards $600,000

There were 14 $1 million homes sold in August for Hamilton. Photo / File

Hamilton's median house price is approaching the $600,000 mark as pressure grows on the city's dwindling housing supply.

The Real Estate Institute of New Zealand report for August shows that Hamilton's median house price now sits at $551,000, an increase from $530,000 in July.

Over the month of August there was a total of 277 homes sold in Hamilton, but the city is still struggling with the demand of more and more buyers.

"There are still more buyers than sellers in Hamilton. And while a good number of homes came onto the market in August, they were snapped up very quickly. The city is still experiencing a shortage of quality homes available for sale," said managing director, Lodge Real Estate Jeremy O'Rourke.

"After a dearth of listings over the winter months, August saw more homes coming onto the market with 333 listings. This compares to 301 homes listed for sale in July and 294 listed in June."

During Augustthere was a demand for houses priced over the $1 million mark, with 14 million dollar homes sold.

This compares with just five homes in the last six months which have sold for under $200,000. This amounts to 77 for the year.

"There is a lot more pricing pressure on homes selling for $800,000 and higher.
"What that means is we are seeing prices in this upper bracket pull away at a faster rate from homes in lower pricing brackets.

"This is causing Hamilton's median to continue to rise."

Homes selling with a $1 in front of them, however, are much more common at the top end of the market.

O'Rourke said there is strong confidence in the Hamilton market coming from not just residential buyers, but developers and investors as well.

"Developers are very active throughout Hamilton.

"They are looking for land to develop duplex and apartment housing options."
"Infill housing is also popping up across the city.

"Additionally, on the outskirts of Hamilton, developers are looking for land to develop greenfields housing communities."

"Additionally, investors are more active than they have been in quite some time.

"There has been some uncertainty among investors for a few years as factors such as insultation regulations, the residential tenancies act and the bright-line test were signalled to come into force.

"We're starting to see investors breaking out of this hesitant mode and becoming more active."

"Overall, all these factors are signals that the Hamilton market is extremely buoyant.

"There is no sign of any looming housing crisis and it's certainly not slowing down as has been reported about the Auckland market," said O'Rourke.