Hamilton’s Boom

The council issued a media release today entitled Construction boom for Hamilton, an official acknowledgement of the recent uptick in both residential and commercial construction activity the city has seen.

Hamilton’s residential construction market continues to rise, with the number of building consents issued from January – December 2015 up almost 60 per cent compared to the same period in the previous year.

The number of new residential dwellings consented in 2015 reached 1188 by the end of the year, compared with 743 in 2014 and 880 the year before.

These consents were worth $286m in 2015, compared with $177 million in 2014 and $206 million the year before.  Over the past three years, approval has been given for 2800 new homes with a total value of $669 million to be built in the city.

The general increase in demand for accommodation has not gone unnoticed by me as I look for a place to rent, and observe the steady upwards trajectory of rents. An unintended side-effect of the Waikato Expressway’s bringing Hamilton and Auckland closer? Perhaps, although there are without a doubt many factors at play.

Hamilton house prices increased nearly 20 percent in 2015 and Tauranga’s average price was up more than 18 percent.

(from House Prices Show Signs of Cooling – Radio NZ)

Included in the release is a table using data from Demographia’s 12th Annual International Housing Affordability Survey, although it has to be said that in many places the document reads more like a diatribe than a survey, which is perhaps unsurprising, given that Demographia is a US-based think tank that generally opposes urban boundaries, “smart growth”, and other constraints on urban expansion. There has been some analysis of their work on Transport Blog.


Affordability metrics for 8 NZ centres (source: Hamilton City Council ; data: Demographia)


The table ranks Hamilton as 3rd most affordable (or 6th least unaffordable) of a list of 8 major NZ centres. This median multiple number is calculated by dividing the median house price by the median gross annual household income. This seems like something we should be quite pleased about, although Demographia would appear to rather disagree, the same report putting Hamilton in the “Severely Unaffordable” category.

Housing Affordability Rating Categories (p12, Demographia International Housing Affordability Survey)

Housing Affordability Rating Categories (p12, Demographia International Housing Affordability Survey)


The increase in Hamilton’s median multiple is doubtless a factor in the increased interest in attached houses, apartments, etc, although younger generations seem less wedded to the detached house and lawnmower approach than preceding ones.

2015 also saw a rise in the number of apartments being built with 81 apartments, 797 houses, 306 townhouses, flats, units and other dwellings consented in 2015.

The latest figures indicate this trend is continuing, with 173 consents granted in December compared to 125 for December 2014 and expectations within the building sector are the construction boom will continue in 2016.

So the relative affordability of Hamilton real estate is something to celebrate, but we should keep in mind that Hamilton’s median multiple is now where Auckland’s was a little over 10 years ago.

Is doing away with planning regulations the best way to tame housing prices in Hamilton?

3 comments on “Hamilton’s Boom

  1. Surely the increase in housing density – building apartments, duplex housing and town houses – is due to changes to planning regulations in the Hamilton City District Plan that allow this increased population density, rather than to doing away with regulations. Demand for housing of this sort is from people who do not want or need the quarter acre lifestyle that the older New Zealander has grown up with. Oversees travel and immigration has also influenced design of housing and population density that is so different from the New Zealand ‘ideal home’ of a single storey. Those newcomers bring their own ideas of housing density far greater even than our new muli-storey duplex buildings, and are no doubt pleased to find what residents see as more crowded, is to them, less crowded than where they have come from.

    Regulations should remain in place to increase housing density, creating more housing to reduce the price. If supply of housing increases more than demand, then cost should reduce in an economic world. Regulations should remain in place to increase housing density, but at the same time other regulations should also limit the density, height and spread of these building blocks to retain some vestige of hope for those who love the open space in New Zealand that our country will not be overrun by condos and industrial buildings.

    To achieve this there need to be planners and politicians who see a whole picture long term rather than mere $$ signs of profit, industry and infrastructure in the short term.

    We need all those, but in a sensible, ordered manner that allows high and low density to live side by side, and industry and infrastructure that is carefully designed with a long term buffer between residences, whatever their density, so that the next generation does not have to live with an irrepairable mistake.

    • You are so right!

  2. Looking at actual demand, just under half of dwellings only need to be one or two bedrooms
    This boom is a good start with a third targeting smaller households and we can see plenty of investors allowed to build different and interesting styles.
    Will be interesting to see if District plan allows this number to increase to 40% as in the 1970s
    Astride the River. A history of Hamilton. By P.J..Gibbons – Page 273

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