Daniel Hopper

Hamilton house values continue their climb - 29 per cent in a year

Hamilton house values ramped up 6.9 per cent in the last three months alone.

Hamilton homeowners are pulling in a cool $1761 a week in the value of their house by simply riding the property price surge.

Latest figures from QV show Hamilton leading the pack among growth in Kiwi property prices with Hamilton house values up 29 per cent since June 2015 and 6.9 per cent in the last three months alone.

By comparison Auckland, long considered the source of inflated house prices, saw values rise 20.4 per cent.

The average Hamilton house is now worth $492,403, and has risen $92,000 since June 2015, meaning the average city homeowner has banked a theoretical $1761 a week during the last year simply by owning a house.

But smaller centres aren't immune - Waikato District values went up 26.4 per cent in the past year, Waipa District 21.3 per cent and Hauraki 18.6 per cent.

First home buyers, outside and local investors and locals were competing for the same housing stock in Hamilton, QV homevalue Hamilton valuer Stephen Hare said.

"You're seeing first home buyers are priced out of the Hamilton market and moving to more rural service towns where it's more affordable," he said.

Entry level prices in Hamilton were between $400,000 and $600,000, he said, while prime real estate was selling at over the one million mark.

Buyers were looking for value in areas such as Te Awamutu, Ngaruawahia and Morrinsville, while Cambridge values were starting to move towards Hamilton levels, he said.

Lodge Real Estate managing director Jeremy O'Rourke wasn't surprised by QV figures after phenomenal price increases in the past three months.

"It has been a long time coming. Some of this is a lot of catch-up," he said.

One $146,000 illustration was a Seddon Road house which sold for $412,000 in October 2015 and again - for $558,000 - in June 2016.

Those hoping for something under $300,000 will have a trickier time.

Houses in that bracket made up 27 per cent of Lodge's city sales in May 2015 but they dropped to six per cent in May 2016.

"Prices have moved so significantly that the availability of property under $300,000 is really, really scarce," O'Rourke said.

Conversely, there was a dramatic increase in buying houses above $600,000, including Hamiltonians looking to upgrade.

And Aucklanders searching for value continued to zero in on Hamilton and Cambridge, he said.

Hamilton's lure was "twice the house they had before" with money still in the bank, Harcourts Hamilton director and general manager Brian King said.

But there is a word of caution for home owners feeling pleased about what their house is earning.

"People have got to remember they're buying and selling in the same market," King said.

First home buyers should get into the market as soon as possible, he said, but there were still good opportunities.

"We're certainly in a good cycle at the moment as far as buying and selling but, hey, it's not going to be like this forever."

Over the Kaimai Ranges, Tauranga city has seen a similar surge in prices - up 23.65 per cent on this time last year.

The average value there is now just below $600,000.

Average house values

Auckland region $842,142

Tauranga $599,915

Nationwide $590,909

Western Bay of Plenty $526,756

Wellington region $516,430

Hamilton $492,403

Politicians talk house values

The jump in house values didn't surprise Labour MP Sue Moroney, who said more needed to be built.

Home owners could feel wealthy on paper, she said, but it was a tough climate for first home buyers.

"Those of us who were fortunate enough to buy our hoses in a much kinder purchasing climate are also concerned about what that means for our children and for the coming generations."

She was also worried about flow on effects for renters who were "dropping out of the bottom end of the rental market".

The "housing boom" was spreading to smaller towns surrounding Hamilton, she said, bringing previously unheard of issues such as homelessness.

Hamilton East MP David Bennett pointed the finger at the Auckland housing boom.

"Two years ago, the Auckland market peaked so there has got to be some relativity there. We're effectively in the same region as Auckland and Tauranga," Bennett said.

"Secondly, there hasn't been enough supply in the market and part of that [problem] is that there hasn't been enough investment by [Hamilton City] Council."

The Government has offered up a $1 billion infrastructure fund for bigger builds - an interest-free loan for the bigger infrastructure needs, to be paid back within ten years.

From Stuff.co.nz