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Hamilton A Hit With Investors

Hamilton is the darling of the property investor – while investors continue to hit record highs in the market, says CoreLogic’s Senior Property Economist Kelvin Davidson.

8 October 2021

14 April 2021

“The high market share for investors has been seen in many parts of the country, including all the main centres, but most notably Hamilton,” he says.

“In quarter two last year, mortgaged investors had a 30 per cent share of purchases in the Hamilton market, but now it’s 39 per cent.”

March was the third month in a row when investors’ share of purchases across the New Zealand housing market was 29 per cent.

Quarter one’s figure, as a whole, was the same, he says – a record high.

There are obvious reasons for this, he says.

Investors getting out of banks

“A lot of the rise in mortgaged investors’ market share has recently been driven by those who have just made their first rental purchase, in other words, they now own two properties, or are buying their second or third.

“We suspect these smaller players will have had the strongest incentive to get their savings out of term deposits and borrow to invest.”

First-home buyers are still faring relatively well in terms of the number of purchases, but their market share has dipped in the past few months, he says.

First home purchases dip

First home purchases slowed from 25 per cent in the third quarter of last year to 21 per cent now.

“This hints that they’re starting to struggle to keep pace with those investors.”

“This isn’t surprising when you consider the strength of value gains in the past six to nine months and what that means for saving the deposit.

And they’re paying more. Those who managed to make a purchase in March paid a median price of $650,000 – which is $100,000 more than they paid a year ago.

That means they now need an extra $20,000 for the deposit.

He expects that from about June on, we’ll be seeing a drop in mortgaged investors buying, due to the new disincentives the government has introduced, including a deposit of 40 per cent.

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