Patrick’s great post on Hamilton the other day prompted me to take a closer look at Hamilton for this Development Update. Like its “Golden Triangle” buddies Auckland and Tauranga, Hamilton is growing at a rate of knots. Let’s hope we can get even better connections between the three with Regional Rapid Rail.
Even though it’s New Zealand’s fourth largest city, Hamilton can sometimes fly under the radar as far as Aucklanders are concerned. But while we’ve been sipping lattes and buying designer dogs, Hamilton has been quietly getting on with the business of getting new homes built – at affordable price points.
This graph, from last month’s Development Update, probably isn’t the best graph to show it. But Hamilton City itself is consenting about 1,200 homes a year. Hamilton is one-tenth the size of Auckland, so it’s the equivalent of Auckland consenting 12,000 homes a year, whereas we’re actually struggling to get above 10,000 and the costs are a fair whack higher. Hamilton is punching above its weight.
Hamilton Gets More Urban
The other surprise is that many of the new homes in Hamilton are terraces. It’s intensification on a small scale, and not as big or flashy as Auckland’s emerging apartment scene. But these small-scale developments, replacing a house with 6 terraces here, or 12 terraces there, add up. Half of all new homes in Hamilton are “attached” – terraces, apartments or retirement village units. That’s on par with Auckland:
This low-level intensification is happening in a range of places around Hamilton. Some of it is on the CBD fringe; some is just a little further, in central suburbs like Frankton, Hamilton Lake and Hamilton East. Hotspots include the area around the hospital, and around Waikato University in the southeast. There’s also a fair bit happening around Five Crossroads.
These are long-established suburbs, getting a new lease of life. More housing means more residents, supporting the CBD, and more urban opportunities in Hamilton. I’ve mapped quite a few, but certainly not all, of these terrace developments in the RCG Development Tracker.
Coming back to those “affordable price points”. Hamilton’s strong mix of terraces mean that it’s building new homes far more cheaply than the New Zealand average, or than Auckland for that matter.
In the last year, the average building consent value for a new Hamilton home was $255,000, vs $364,000 across NZ or $393,000 in Auckland. Those “values” are just construction costs, really, and you’ve got to add on land/ other costs for new homes – but it means that homes in Hamilton can work out pretty cheaply.
Even allowing for all the terraces being built, homes in Hamilton are still coming out cheaper, in large part because they’re more modest. The average new house in Hamilton is 185 square metres, vs 207 for New Zealand or 230 for Auckland. Terraces also tend to be a bit smaller (107 sqm for Hamilton, 117 sqm for Auckland). And ‘costs per square metre’ of home are also 10-15% cheaper, which might mean a more basic spec or lower labour costs.
New housing coming onstream, at a good rate, helps to keep a lid on house price inflation. Although house prices have jumped in Hamilton, with the median now above $500,000, there are still quite a lot of options for cheaper, including new homes. It’s almost impossible to find any homes in Auckland below that half million mark.
What can Auckland learn from this? Maybe not a great deal. With the Unitary Plan now in place, there are a lot of places around the city where we could do more small-scale terraces. The main issue is just a shortage of builders, and there’s no quick fix there.
One thing we can take from Hamilton, though, and it’s not rocket science. If we build smaller homes, they’ll be cheaper to deliver. And if we build them in central locations, people won’t have to drive too far (hey, maybe they’ll even be able to use public or active transport), so their travel costs are lower. That means cheaper living costs overall.