In the last five years (2015 to 2020) Hamilton’s population grew 20 per cent faster than the national average. With an estimate of 176,500 people living in our region in 2020, was does this rapid population mean for our housing?
Migration to Hamilton has boomed in recent years. In 2020, our net migration came in at 2,769—a 21.7 per cent increase from 2019. It’s also worth noting that this includes overseas migrants intending to stay for 12 months or more, plus New Zealand residents returning after an absence of 12 months or more.
The influx of migrants on working visas is one of the key drivers of our city’s high migration numbers and overall population growth. Of the 4200 person increase to Hamilton’s population in 2020, net migration* accounted for 2,769 people (65.9 per cent).
*Arrivals minus departures from both international and interregional migration.
Where are they coming from?
Overall, 24 per cent of Hamilton’s population were born overseas, with the most common country of birth being Southern and Central Asia, followed by North-East Asia and North-West Europe.
“A large proportion of Hamilton’s new residents are migrating from other areas in the Waikato and from Auckland,” says Jeremy O’Rourke, Managing Director of Lodge Real Estate.
What’s more, the data shows us that in 2020, Waikato’s net internal migration was 48 per cent. Based on census data (2013)*, a large proportion of internal migrants are aged between 20 to 24 years, with the 15 to 19 year age group coming in at second highest. This is a common trend across all cities that possess a major tertiary education centre. In Hamilton’s case, it’s the University of Waikato. The strong departure figures in the 25 to 35 age group bracket is further evidence of this, as graduating students leave Hamilton.
*2018 census data not available at the time of publication.
The golden triangle of Hamilton, Tauranga and Auckland provides approximately 50 per cent of New Zealand’s total filled jobs and generates over half of our national GDP. Given these statistics, it’s no surprise that many Kiwis are migrating northwards to study and fill jobs.
With Hamilton’s new Ruakura Precinct added to the mix, which will accommodate between 6,000 and 12,000 jobs between now and 2060, this number is likely to grow. In fact, the NZ Transport Agency predicts that Hamilton, Tauranga and Auckland will home 53 per cent of New Zealand’s population by 2031.
Within Hamilton itself
We’re also seeing movement within Hamilton itself. Trends from census data show that people, especially young people who have finished studying, are moving away from the central city areas and settling on the more affordable city fringes.
What does this mean for Hamilton’s property market?
Looking at future projections, migration to Hamilton is set to continue, though not to the same level as previous years. As people flock to the region, housing demand will remain high. Several residential development projects, such as Peacocke, Rotokauri Rise, and Jack’s Landing are underway to support this increase, indicating that Hamilton still has a shortage of housing stock.
The result of Hamilton’s population growth, of which migration plays a major role, is an increase in higher density living—apartments, duplexes, and townhouses for example—and new projects to “fill-in” the vacant land within the city’s boundaries.
In 2019, the 54 per cent of new residential dwellings consented were for high-density housing (townhouses, flats, units and apartments). Ten years prior in 2009, this portion was at 22 per cent, showing the radical shift in property type.
“Hamilton is a very porous city and we’re seeing a lot of in-fill happening in the Frankton corridor, along with high-density developments around the fringe of the CBD, such as the Parkhaven specialty block,” says Jeremy O’Rourke, Managing Director of Lodge Real Estate.
“We’re also seeing apartments selling in Rototuna on top of the commercial development there. So looking forward, we can expect to see more pockets of high-density living across the city.”
Hamilton’s growing population has also increased the pressure on rents. As of February 2020, Hamilton had a home ownership rate of 44%, lower than the national average of 51.2% in part due to Hamilton’s high student population. The other 66% of Hamilton’s population either live in a family trust home (10%) or rent/live in a home they do not own (46%).
From a buyer and investor perspective, Hamilton’s fastest growing suburbs also bring opportunity as new facilities and amenities (sports centres and schools for example) are built to support the community. These facilities will not only improve the liveability of the suburb, but may also influence its popularity and the demand for homes in the area over time.
In summary, migration—particularly internal migration from within New Zealand—is playing a significant part in the high demand for property in Hamilton. For home sellers and investors, it means that property growth will continue to trend up while rental properties will remain in high demand for the foreseeable future.
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