NZ's real estate market is heating up once again
After a chilly period that spanned over a year, New Zealand’s real estate is once again heating up.
OneRoof investigated the contrasting temperatures of the market in the country’s hottest and coldest towns, revealing insights from agents and experts on whether they’re feeling the heat or still experiencing chills.
Rangiora, NZ’s hottest town
Rangiora, in Canterbury, known for holding the country’s highest recorded temperature, is witnessing a surge in house prices.
Agents have reported increasing interest from North Island buyers seeking a move south.
With an average property value of $706,000 in December, nearly half of Auckland’s average property value, Rangiora's appeal lies in its affordability, drawing attention from as far as Tauranga and New Plymouth.
Russell Hume, of Total Realty Rangiora, said vendors who were meeting market expectations were experiencing successful sales, with his office achieving a monthly sales volume of around 70 homes.
“We’ve been getting some good results in the executive home market. People are coming down from the North Island and Rangiora represents such good value compared to other centres,” he said.
“People like the lifestyle here. It is hot but it’s a dry heat, not humid and wet like Auckland. People coming from Auckland can be mortgage-free in some cases.”
Hume said he relocated from Christchurch to Rangiora to evade traffic congestion and enjoy access to local rivers, along with benefiting from the increasing array of quality cafes and restaurants in the area.
Kristyn Barnett, of Property Brokers Rangiora, said that following a subdued winter, the Rangiora market was experiencing a resurgence.
“There seems to be a lot more activity and there are quite a few people coming down from the North Island,” Barnett said.
She noted a rise in activity at open homes, although first-home buyers continued to face challenges in securing finance at prevailing interest rates, OneRoof reported.
Lake Tekapo, NZ’s coldest town
Tekapo, acknowledged as New Zealand’s coldest town, experiences temperatures frequently below zero degrees. However, its housing market is benefiting from rebounding tourist numbers, with the accommodation sector returning to pre-COVID health.
Steven Howes, of LJ Hooker in Tekapo, said the market is primarily driven by holiday homeowners and investors eyeing the short-term rental sector.
“The biggest issue buyers have faced in our area like most is increasing interest rates and finance,” Howes said. “In most cases these people are buying a second or third property but as rates start to come back, we expect to see a lot more activity in 2024 when people realise the returns and want a slice of the action.”
He said short-term rentals in the area can yield anywhere from $70,000 to $90,000 per year. With tourism making a comeback, occupancy levels are returning to pre-COVID levels.
Howes observed a trend away from sections and toward finished homes due to the rising costs of new builds. He also noted a shortage of listings to meet the growing demand.
Bayleys agent Hamish Lane acknowledged challenges in the holiday accommodation investment sector, citing difficulties in securing lending from banks. Rising building costs have led to section resales in the Station Bay development, with some buyers unable to afford construction.
“We sold about 30 sections in there and a lot of them have come back on the market because people just can’t afford to build,” Lane said.
The Mackenzie District Council has commissioned an investigation into the growing housing crisis driven by population growth, international migration, and tourism.
OneRoof-Valocity figures for December indicated that Tekapo’s average property value grew by 1% over the previous three months to $1.074 million, a 13% increase from pre-COVID values.
To read the OneRoof report, click here.
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