Hamilton Property Market

7 key points you need to consider if buying or investing in the Hamilton property market

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Ed McKnight

Economist, property investor and host of the Property Academy Podcast
Capital Growth of Hamilton Suburbs

Which Hamilton Suburb's House Price Grew the Fastest?

Which Hamilton Suburbs Grow in Value The Fastest? This map lets you find out for yourself. Double click on the map below to zoom in and explore different suburbs.

Each dot represents a different suburb, and the colour of the dot represents how quickly house prices have increased over the past 20+ years.

The redder the dot ... the quicker house prices have grown in that suburb.

Hamilton Suburbs Yield

Which Hamilton Suburb's Have the Highest Yields?

The country's median gross yield is 3.26%, while the median Hamilton properly achieves a gross yield of 3.36%. This means that Hamilton typically achieves a slightly higher yield compared to other areas of the country. However, gross yields vary widely depending on which suburb you choose to investigate.

So, which suburbs in the Hamilton property market have the highest gross rental yields?

Navigate the map below to find the suburbs where houses produce the most cash for their investors. The redder the dot...the higher the yield.

Fastest Growing Suburbs

House Price Increase Ranges From 6.15% - 7.53% Based on Suburb. But Which Were the Fastest?

The median house price in Hamilton grew at 7.34% between Jan 2000 and Dec 2021 ($166,000 to $789,000).

However, house price growth varied widely in different suburbs.

Within that period, the median property in Fitzroy grew at 7.75% – the fastest in the Hamilton region.

These houses grew in value from $153,700 to $794,200 – meaning that Fitzroy homeowners earned $640,500 within the period. That is almost $29,114 a year.

The slowest growing suburb was Grandview Heights, which grew at 6.35%, from $236,200 to $914,800. That's a total of $678,000 - just above $30,845 a year.

The other suburbs that grew the fastest were:

The suburbs that grew the slowest were:

Is the Hamilton Property Market Undervalued?

Are Hamilton Houses Overpriced? Hamilton's Median House Price is 0.70% above its long term average

On average, over the last 28 years, Hamilton's median house has been 94.68% of New Zealand's median house price.

To put this in simple term, if the median house price in New Zealand was $100,000, we'd expect Hamilton's median house price to be $94,680.

As you can see from the graph below, sometimes Hamilton's house prices are above that long term average and sometimes they're below this average. But, over the long term, you would expect that Hamilton's house prices would trackback to that long term average.

If that's true, that means that you can use this comparison to check whether a region appears to be overvalued or undervalued compared to its long term average.

If Hamilton is overvalued, the dark blue line will be above the light blue line. If Hamilton is undervalued, the opposite will be correct.

In August 2015, Hamilton's median house price for the previous 12 months was 82.42% of the New Zealand median house price, suggesting that the median house was roughly 12.26% undervalued compared to its long term average at the time.

Perhaps, it's not surprising then that the region saw enormous capital growth in the following five years.

During that time, the median house price increased from $417,000 to $655,000 (by August 2020).

Based on those, the average owner of a Hamilton property saw their wealth increase by $238,000. You can see this by hovering over the data in the Hamilton Median House Price graph below.

Council Breakdown - Over/Undervalued

Where are House Prices Most Over and Undervalued within the Waikato Region?

This map shows a breakdown of how over or under-valued each council area is right now in the Waikato property market. These figures are calculated exactly the same way as the graph in the above section.

The Waikato district appears to be the most over-valued. House prices there are about 21.04% above where we would usually expect them to be over the long term.

Otorohanga, on the other hand, appears to be under-valued. House prices in this district appear to be 15.80% below where we would expect them to be.

This means that we've got greater confidence that Otorohanga would receive a higher rate of capital growth (house price increases) over the next 5-10 years compared to Waikato.

Affordability

Where Are the Most Affordable Properties in Waikato?

The map below depicts which districts within the Waikato Region have the most and least affordable house prices (REINZ, December 2021).

The darker the district, the more expensive the average house price for that area...

The Thames-Coromandel district is by far the most expensive district within the Waikato region, with properties reaching an average price of $1,050,000 (December 2021).

By comparison, the Waitomo District is the most affordable, with an average house price of just $440,000. That's an enormous $610,000 difference compared to Thames-Coromandel.

Population Growth

Which Part of Waikato Gets the Highest Population Growth?

The map below illustrates the projected population growth for each district within the Waikato Region over the next 25 years (2018 - 2043).

The darker the district, the more the population is predicted to expand in that area...

Over this period, Waikato district is expected to see the most growth of all the council areas within the region - 35.24% in total. Hamilton City is is also expected to see a large growth over the next 25 years - by approximately 33.25%.

By contrast, the Waitomo District is expected to shrink by 10.89% over the same timeframe.

Hamilton City

Hamilton City Property Market

Hamilton is made up of 34 suburbs. The most expensive suburb is Flagstaff which has a median house price of $1,161,700. While the most affordable suburb is Bader, which has a median house price of $613,700.

Over the last 21 years of all Hamilton City suburbs (Jan 2000 – Dec 2021), Fitzroy had the fastest-growing house, at 7.75% per year. That is 6.90% faster than the median Hamilton house price.

The suburb that grew the slowest over that period was Grandview Heights, which grew at a rate of 6.35% per year. That’s 12.50% slower than the median Waikato house price.

7 key points for buying or investing in the Hamilton property market

7 key points you need to consider if buying or investing in the Hamilton property market

Hamilton house prices skyrocketed over the last 20 years. What are the reasons for its success? And how will this impact future prices? Here are 7 crucial insights into the Hamilton property market.


1) Setting the Scene – Hamilton City Has Had Enormous House Price Growth

Hamilton house prices have increased enormously since the turn of the century. The median house price in the average Hamilton suburb increased at 6.87% per year (Jan 2000-Jun 2021). Even the worst performing suburb, Grandview Heights, increased at 6.02% – above the 5% Opes Partners makes its forecasts on.


2) Waikato House Prices Have Also Increased Significantly

In January 1992, the median house price in the Waikato Region was $100,000. In June 2021 this grew to $702,750, or about 6.83% per year. While the Hamilton property market is only one part of this, it is a driving force.



3) Waikato’s Iwi Has The 2nd Highest Level of Assets Under Management – And They Are Backing Property


Waikato-Tainui has almost $1.45 billion assets under management, 52% of which are invested in property. Their active management style has brought new long term infrastructure to the region, including the Te Rapa shopping centre, multiple hotels, and the upcoming Ruakura Inland Port.



4) Waikato Expects To Receive The 3rd Highest Population Growth In The Country Over The Next 20 Years


The Waikato’s population is expected to increase from 467,200 to 548,500 between 2018 and 2038. That’s a 17.40% increase, and only lags behind the Auckland and Canterbury regions. This is one core reason the Waikato ranked so highly in our analysis of NZ property markets.

Projected Regional Population Increases and impact on Hamilton Property Market



5) The New Ruakura Inland Port Is Expected to contribute an additional $5 billion to the economy.

It Is Massive. 480 Hectares Massive.
The Ruakura inland port will be a major contributor to Hamilton City’s economy. It will connect to both the Port of Tauranga (NZ’s largest port) and Ports of Auckland by rail. The port is actively pitching to businesses to move operations to Hamilton, which will attract jobs, spending and housing demand.



6) The Major Benefits of the Waikato Expressway Are Still To Come


The Waikato Expressway is expected to be completed in 2021, shaving 35 minutes off the journey from Tirau to Auckland. This will allow more people to live in the Waikato and commute to Auckland. While seven of the 11 sections of the expressway are already completed, two of the four sections under construction will provide some of the largest benefits. This includes a new motorway running down the east of the city, connecting to the new inland port.

Waikato Expressway and Effect on Hamilton Property Market

7) Waikato is the Most Affordable of the Four Major North Island Regions


The median house price in the Waikato is $538,000, $61,000 cheaper than the Bay of Plenty, almost $100,000 cheaper than Wellington, and over $280,000 cheaper than Auckland. This makes investing in the Waikato an affordable option for investors to get into the market.




My Key Takeaway and Recommendation:


In the past, Hamilton’s story has been one of agriculture. Today it’s a story about infrastructure. Hamilton is uniquely positioned to be the hub of the North Island. The inland port will provide businesses access to 2 million New Zealanders, not just in Auckland, Waikato and the Bay of Plenty, but Taranaki, Manawatu-Whanganui, Hawkes Bay and Gisborne. No longer just the centre of the rural heartland – we’re seeing Hamilton transform to the beating heart of the North Island. Great news for the long term property market in Hamilton City.

Other Property Markets

Other Property Markets to Look Into

If you found this article useful, then you might also like our analyses on the other property markets in New Zealand. You can read all about the Auckland property market, the Wellington property market and the Christchurch property market by clicking any of the links mentioned here.

1601614029185

Ed McKnight

Ed McKnight is the host of the Property Academy Podcast – NZ's #1 business podcast. He is an economist, having studied at the University of Auckland and the University of Waikato. He's a frequent writer for Informed Investor Magazine and has contributed to NewsHub, Stuff, OneRoof and Property Investor Magazine.