Praneeta Mahajan
Hamilton, July 15, 2024
Amidst a tough economic climate, Hamilton has continued to thrive economically in 2023, solidifying its status as the country’s fastest growing city.
The Hamilton City Council’s recently released 2023 Annual Economic Report highlights the city’s robust economic performance and provides an optimistic outlook for the upcoming year.
The only one of its kind for Hamilton, the report includes information from the Council’s own data sources as well as from organisations including Statistics New Zealand and Infometrics.
The report shows how Hamilton’s diverse economy has helped it weather the pandemic better than New Zealand’s other major cities, with continued growth in its economy, population and housing since then.
Business sector grows
Despite the economic downturn affecting the rest of the nation, Hamilton’s business sector flourished, with 372 new businesses opening their doors in 2023. This impressive growth surpasses the national average and signifies a dynamic business environment within the city.
Additionally, the job market in Hamilton expanded significantly, with nearly 3000 more filled positions compared to 2022.
Hamilton’s population growth further underscores its economic vitality. The city welcomed 6,100 new residents, marking a 3.4% increase and making it the fastest growing city in New Zealand for the first time. This population surge is both a cause and effect of the city’s economic momentum.
Commercial and industrial development also experienced substantial growth. In 2023, Hamilton saw the completion of 80,000 square meters of new development projects, including the new ACC building in the central city and the expansive 40,000 square meter Kmart distribution centre in Ruakura. By the end of the year, an additional 120,000 square meters of non-residential development was underway, promising continued economic expansion.
Challenges in Development and Housing Market Resilience
However, the city was not without its challenges. The development and construction sectors faced significant hurdles, with residential consenting, construction, and completion all declining from the previous year.
Greg Carstens, Growth Funding and Analytics Manager, acknowledged the slowdown but remained optimistic about Hamilton’s future prospects.
“We anticipated some slowdown in this economic environment,” Mr Carstens stated.
“However, Hamilton is well positioned to kick into gear when the economy improves. We have a large pipeline of projects consented and ready to go. As soon as economic conditions and interest rates improve, we expect to see development pick up again.”
Mr Carstens attributed the slower development activity to several factors, including inflation, high interest rates, increased construction costs, and stricter lending practices, which have made home construction less feasible for both developers and buyers.
Despite these challenges, Hamilton’s housing market remained resilient. After a dip in 2022 and the first half of 2023, house prices began to climb again, with the median house sale price increasing by $45,000 to $815,000 by the year’s end.
Community Reactions
Members of the community have expressed mixed feelings about the city’s economic trajectory. Mr Patel, a local business owner, shared his optimism and said, “It is incredible to see Hamilton growing so rapidly. As a small business owner, the increase in population and business opportunities has been very encouraging.”
In contrast, John Murray, a resident concerned about affordability, voiced his worries and said, “While it is great that Hamilton is expanding, the rising rates are making it difficult for salaried people with families. We need to ensure that increase in costs is affordable for all segments of society.”
Resilient and Attractive for Future Investment
Looking ahead, the report predicts continued resilience and economic strength for Hamilton, though it cautions that challenges remain. “The next two years will be challenging for many, but Hamilton is a resilient city and remains attractive for investment and growth,” the report concludes.
Hamilton’s ability to defy national economic trends and continue its growth trajectory highlights its unique position as a hub of opportunity and development in New Zealand. As the city navigates through economic challenges, its future remains bright and full of promise.
Praneeta Mahajan is an Indian Newslink reporter based in Hamilton.
