Hamilton's first million dollar suburb?

Hamilton's rocketing residential property market has hit the top price bracket with a record number of million dollar homes sold in May.

Six Hamilton homes sold above the $1 million mark in May, compared to three in April, and two a year ago.  This makes for
an 89 per cent increase in the number homes above the million dollar mark sold in Hamilton between May 2015 and May 2016.

Million dollar properties have traditionally been sold in the river and lake areas, however, buyers were now prepared to pay similar prices in the northeast of Hamilton.

The rapid price growth in Flagstaff is surprising.

Will Flagstaff become our fist million dollar suburb? This time last year that question was not even posed.

QV valuer Stephen Hare said there were a few properties in Flagstaff that were selling for about $1 million but majority were selling between $750,000 and $950,000.

Demand for top price tier properties was being driven by competition from investors for cheaper houses, he said.

"Investors have been buying low to medium value housing causing market movement. Property owners who have sold their medium value property are now buying in a higher value bracket in suburbs like Flagstaff," Hare said.

"The Hamilton property market went through a stagnant period after the last market peak. Since 2008 there was very little market growth, however, in early 2015 the market started to move again.

"This was largely driven by a low number of houses on the market and extra pressure from buyers from out of Hamilton.

"This movement has continued for the past 18 months and there is no sign of it stopping yet. Therefore this is resulting in Flagstaff heading towards being the first million dollar suburb in Hamilton," Hare said.

The only other areas at the $1 million mark in Hamilton were some properties with good views along River Rd and around the Lake, he said.

The remaining housing stock throughout Hamilton is at a much lower level, he said.

O'Rourke said the lack of property listings was also contributing to the number of million dollar sales.

Buyers were also less hesitant to pay seven figure prices for a home than they were a year ago,
"Factors such as low interest rates, higher decile schooling in certain areas, and consistency of neighbourhood are prompting buyers to upgrade their homes in this market. They're aware if they wait to upgrade, it could cost them more in the long-run," O'Rourke said.

"While demand for housing continues to remain strong, sales stock is low so choice is limited. This increases competition for available properties – including the million dollar homes.

"People know if they don't get in today, they're likely to miss out on the home  they want. Many are willing to pay larger sums of money to ensure they get the property that best fits their criteria," he said.

According to the latest Real Estate Institute figures, median house prices have also hit a record high.

Hamilton's median house price increased to $480,000. 

New Zealand's national median house price reached a record high, passing the $500,000 mark for the first time to hit $506,000.

Hamilton's most expensive suburbs for median house prices:
1. Huntington: $663,550
2. Flagstaff: $642,550
3. Rototuna North: $631,900
4. Rototuna: $625,600
5. Queenwood: $577,750

From stuff.co.nz