This as as out-of-towners flock to the region
Taranaki is gearing up to become the buyers’ haven of 2024, attracting attention from cash-ready buyers seeking lucrative deals in the property market.
Luke Conroy, regional general manager of Bayleys Taranaki, said the region’s property allure is no longer a secret, with 26% of buyers in the past year hailing from outside the area – a trend he expects to persist.
“This is where people can do some smart buying,” Conroy told Stuff.
According to the latest report from REINZ, Taranaki recorded a median house price of $565,000 in November, an 8.9% decrease from the same period in 2022, with houses taking an average 37 days to sell.
The national median house price was $790,000 in November.
Both figures could potentially increase this year, with Westpac economists predicting a nearly 8% rise in house prices throughout 2024.
Conroy identified the most active segments as the first home bracket ($525,000 to $650,000) and properties exceeding $1 million, with a noticeable lull in between.
However, securing finance remained the primary challenge for aspiring homeowners, he said. This was exacerbated by high-interest rates, deterring some from upsizing or overpaying for it.
“Some are going from a 2.5% rate and staring down the barrel of double that or more, which has an astronomical effect on repayments and servicing the mortgage is unattainable,” Conroy told Stuff.
Jane Simonson, owner of Ray White New Plymouth, echoed Conroy’s observations, noting an influx of out-of-town inquiries, including interest from the United States, South Africa, the United Kingdom, Canada, and Australia.
“People have found our region,” Simonson said. “They used to think we were a farming province or oil and gas, but they are seeing there is so much more.”
She is optimistic about the real estate market in 2024, citing her continuous busy schedule over the festive period with people expressing interest in viewing properties.
Daniel McDonald, managing director of McDonald’s Real Estate, shared a similar experience.
“There’s definitely more interest and urgency building, and so we’re excited for 2024,” McDonald said. “Last year was very low volume wise for the number of sales in all brackets and that comes down to uncertainty, with things like interest rates and the economy, but confidence is picking up.”
McDonald also observed a rise in out-of-town buyers, particularly in smaller towns around the mountain, including Stratford, Hāwera, and Opunake. He believed this was because smaller towns offered attractive house values compared to bigger cities, making them appealing to buyers.
“It’s a buyers’ market at the moment, so buyers in a cash position have an advantage,” he said.
With the market favoring buyers, agents have noticed a resurgence of investors.
Nicki Smith, president of Taranaki Property Investors’ Association, attributed this resurgence to changes in government policies affecting interest deductibility.
The National party initially pledged to gradually introduce interest deductibility, but as per the coalition agreement, the process now begins with a 60% deduction in 2023/24, followed by 80% the subsequent year, and reaching 100% in 2025/26.
“Election promises are one thing, so we hope they do what they said and give us back the deduction,” Smith told Stuff. “Taranaki house prices have stayed lower, so it’s a good time for local investors.”
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