Lack of Hamilton buyers creates investor opportunity

MEDIA RELEASE
14 February 2014

Lack of first home buyers creates investor opportunity in Hamilton market

Hamilton, New Zealand – Lodge Real Estate’s managing director, Jeremy O’Rourke, said 2014 heralds good news for property investors looking to snap up better yielding residential properties in the Hamilton market.

“In January we’ve really started to see the effects of the Reserve Bank’s intervention in raising the loan-to-value ratio (LVR) last year. First home buyers have really pulled out of the market.

“The LVR challenge for first home buyers, however, has created great opportunity for investors. There are more quality homes to choose from under $400,000, plus prices in the lower half of the market have been suppressed in recent months.

“As a consequence, investors taking advantage of the current market and subsequently renting their new properties are getting better yields than they would have, say, six months ago,” explained Mr O’Rourke.

Overall, Hamilton city’s median house price has decreased to $350,000 in January 2014 from $385,000 in December 2013. This compares with a median of $320,000 in January 2013.

“The decrease in the median can’t be analysed in isolation. The fact is there was a spike in the median in December was due to a lack of buyer activity in the lower half of the market, while the over-$400,000 end of the market remained strong during that month.

“January’s median really just reflects the market returning to overall levels of buyer activity similar to October and November 2013,” explained Mr O’Rourke.

The number of homes sold in Hamilton during January 2014 was 156, as compared to 204 sold during December 2013. This compares to 180 sold in January 2013.

Lodge Real Estate is Hamilton city’s largest real estate agency by volume.

-ENDS-

Hamilton housing market January 2014 - key facts:
• Hamilton’s median house price was $350,000 in January 2014.
o The city’s median house price has fallen from $385,000 in December 2013.
• The number of homes sold in Hamilton during January 2014 was 156.
o This compares to 204 during December 2013 and 183 during January 2013.
• The number of homes listed on the Hamilton market has risen with 894 homes available for sale in Hamilton at the end of January 2014
o This compares to 880 at the end of December 2013 and 945 at the end of January 2013.
• The average number of days to sell a Hamilton home was 42 in January 2013.
o This compares to 30 days in December 2013 and 41 days in January 2013.

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