First rung falls furthest in Hamilton housing downturn

There is a growing divide between Hamilton’s most- and least-expensive homes, with the downturn hitting the first rung of the property ladder hardest.

New analysis by independent property valuers Quotable Value (QV) shows the average value of a home in Kirikiriroa’s lower quartile – the city’s 25% least expensive homes – has fallen 6% since the start of the year.

By comparison, average values have reduced by an average of just 0.4% in the upper quartile and 2.1% across Hamilton overall.

Local QV registered valuer Marshall Wu said it was welcome news for first-home buyers, who typically target homes at the more affordable end of the property ladder and continue to make up a large share of activity across the city.

“The lower end of the market is softening more due to a high volume of listings, giving first-home buyers more choice and time to compare options,” he said.

“Affordability is another key factor, as lower-end buyers are generally more sensitive to interest rates, lending criteria, insurance and household costs.

“In comparison, upper-end buyers often have stronger equity positions and face less competition from available stock, helping to support values.”

This gap is also apparent when measured against the local market’s peak at the end of 2021. Lower-quartile values remain an average of 17.3% below peak, compared with 14.2% at the upper end and 15.5% across Hamilton overall.

“That creates more opportunity for buyers still trying to get onto the property ladder, but it may be less welcome for those who bought near the peak and intend to sell soon,” Mr Wu added.

He said conditions at the lower end were likely to remain competitive for the foreseeable future, with buyers continuing to have plenty of choice and time to compare options.

“Townhouses, terraced homes and units are generally softening because of oversupply, while standalone houses, recently renovated properties and new standalone dwellings are attracting stronger demand.”

Mr Wu said Hamilton was not alone in seeing first-home buyers drive much of the activity at the lower end of the market, with similar patterns evident across much of the country today.

Keep track of the housing market via our interactive QV House Price Index or search here to discover the latest value of your home.