"The city's auction rooms are regularly taking up to 10 homes to auction at one time. Whereas, as recently as July, we would only take four to five weekly.
"Buyers have finally switched on that they must get themselves unconditional and show up to auction ready to compete. If they don't, they miss out.
"And for those properties not going to auction, we'll almost always have buyers in competition and the number of offers can sometimes be in the double-digits."
O'Rourke said the extreme competition in the Hamilton market signals that prices will continue rising through summer.
"We're seeing high confidence as buyers look to the future. People are feeling safe in their jobs and confident they can carry larger mortgages over the long-term. The recession certainly hasn't bitten in Hamilton."
O'Rourke said the $1 million buyers were also out in force.
"July was the first time ever that the number of Hamilton homes sold at $1million or more accounted for over 10 per cent of the city's total sales.
"And a lot of these sales are coming from people who are already in high-end homes who are switching to larger properties. That's because you can shift from a $1 million home to around a $1.4 million home without increasing your interest cost with rates being so low."
O'Rourke predicts buyers will continue switching into higher end homes as interest rates hold.
He said another issue in Hamilton's housing markets was that developers were banking land.
"Development land is in extremely hot demand and this land is being sold at record prices across the city.
"While it's good news that more development land is being sold because more homes being built will help ease the city's housing shortage. What's worrying is an emerging trend of some property investors banking land.
"Some are buying development land with the intention of sitting on it and trading it at a future date. This takes critical land out of the available pool for housing development."
O'Rourke predicts some developers will continue banking land as they gamble on land prices continuing to rise.
He said it's not just home buyers who are frustrated by the current market. Renters are also exasperated.
"More first-home buyers are in the market and taking advantage of the low interest rates. When that happens, normally vacancy rates for rental properties will soften, making it easier for renters to get into a home.
"At the moment, we aren't seeing this happen. There is an absolute slew of people wanting to rent.
"And not only are vacancy rates at an all-time low, there's also an over-abundance of rental properties that don't suit families. For instance, we have 66 properties available for rent today but 44 of these are studio apartments. Our team is getting around 700 rental inquiries a week, so you can imagine how irritating it is for those looking to rent."
The red hot housing market has seen the likes Century 21 New Zealand join the Real Estate Institute of New Zealand (REINZ) calling for the Government to review the Home Start grant thresholds.
"It's great Prime Minister Jacinda Ardern has confirmed the Government is looking at ways to help first-home buyers get into the property market. Updating the Home Start grant and making it fit for purpose ahead of real estate's summer season must now be a priority for the new cabinet," said Derryn Mayne, owner of Century 21 New Zealand.
The subsidy scheme enables qualifying first-home buyers under certain income caps to receive a grant to purchase property under set regional house price caps. For example, Aucklanders must buy an existing property for $600,000 or less, or $650,000 for new builds. For the rest of the country, apart from Queenstown, it's less.
"As well as lifting the price caps, I'd like to see the income thresholds lifted, and the grant itself lifted beyond $5000 per person. All the numbers in and around Home Start need to be revised urgently, particularly as the market is set to only increase over the coming months. As it stands, every day, fewer and fewer properties and first-home buyers qualify, killing the Kiwi homeownership dream for many," says Mayne.
REINZ has revealed only one-third of New Zealand properties are now below the price cap threshold, that's down from 40 per cent in June. In Auckland, only 12 per cent of properties are now below the threshold.
