New Zealand’s fastest growing city, Hamilton, continued to see economic growth in 2023, despite the country entering a recession.

Hamilton City Council has released its 2023 Annual Economic Report, providing a deep dive into Hamilton’s economic performance for the year, and an outlook for the next 12 months.

Business growth continued to outstrip the national average, with 372 new businesses opening their doors in 2023. The job market also saw growth, with nearly 3000 more filled jobs than in 2022. Supporting this, Hamilton’s population grew by 6100 people (3.4%), making it the fastest growing city in the country for the first time.

2023 was another big year for commercial and industrial development, with 80,000m2 of development completed, including the new ACC building in the central city, and the 40,000m2 Kmart distribution centre in Ruakura. At the end of the year, another 120,000m2 of non-residential development was underway.

However, like other parts of the country, Hamilton weathered some significant challenges in 2023. Development and construction in the city faced tough times, with residential consenting, construction and completion all down from the previous year.

Growth Funding and Analytics Manager Greg Carstens said some slowdown was expected in this economic environment, but 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.”

Slower than usual development activity in New Zealand’s fastest growing city was due to several factors, said Carstens.

“We’re still growing, but much more slowly. Inflation, high interest rates, higher construction costs and stricter lending has made home construction less feasible for both developers and buyers.”

Despite this, house prices rose in 2023. After falling in 2022 and the first half of 2023, they began to climb, with the median house sale price increasing by $45,000 to $815,000 at the end of the year.

The report predicts that Hamilton will continue to be resilient and punch above its weight economically, but warns that challenges still lie ahead.

“The next two years will be challenging for many, but Hamilton is a resilient city, and still attractive for investment and growth.”

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