Property values surge

PGG Wrightson Te Anau sales consultant Sandra Macnamara outside a recently sold house whose ratings value was $330,000 and sold this month for $450,000.

Over the course of one year, average values for Southland District homes have jumped almost 19%, a percentage increase that surpassed Dunedin, Wellington, Central Otago and, yes, even Auckland.

House values in many of New Zealand's regions are soaring, and properties in the Southland District, especially Te Anau, are forming a part of the wave.

According to QV, the average value for a home in the Southland District was $228,760 in December 2016. The average price was $271,698 for December 2017.

The Southland District's 18.8% jump made it the 7th largest percentage increase across the country. The district's median sale price is also 24% higher than its September 2015 capital value.

It also appears that houses aren't staying on the market for too long.

According to the Real Estate Institute of New Zealand (REINZ), the median sale price for a house in Te Anau was $240,000 in 2015 and the median number of days for a house to sell was 118. 

In 2017 Te Anau's median sale price went up to $361,500, with houses selling within 25 median sell days. 

REINZ chief executive Bindi Norwell said median prices (i.e. the midway point — half sell for more and half for less) had been slowly increasing across the Southland region, and in particular for Te Anau, for some time now. 

"This is in line with many of the regions and provincial towns across New Zealand as people look to move away from the larger cities for lifestyle and affordability reasons."

Ray White Te Anau business owner and salesperson Tania Hefford at a Te Anau township property whose capital value was $215,000 and recently sold at $370,000.

However QV statistics show there were some interesting cases outside of Te Anau as well. In the last three months one house sold in Athol that had a 62% difference between its capital value and 
selling price. 

PGG Wrightson real estate saleswoman Sandra Macnamara said Te Anau was still truly competitive compared to Central Otago, and much of their market consisted of young families and empty nesters from Central Otago looking for a relaxed, safe and affordable lifestyle.

PGG Wrightson real estate branch manager Nick Robertson said other towns were also taking off, such as Lumsden, Riverton and Manapouri. 

Ray White Te Anau business owner Tania Hefford said most of their buyers had been New Zealanders ranging from Southlanders to people from Christchurch and the North Island looking to escape the hustle and bustle. 

So far the change of government had yet to have any effect on the Te Anau market; however, as overseas investment in Central Otago continued, it was possible a trickle-down effect could come down to Southland, she said.

TelferYoung (Southland) Ltd director and registered valuer Regan Johns said the majority of properties were selling above their 2015 rating values. Market conditions had improved since the last review in 2015 and would be updated later in 2018. 

He said they saw no direct correlation between rating valuations and sales prices because rating valuations were mass appraised over a three-year period, typically without an inspection of the property. 

"It's the equivalent to a health check online rather than seeing a doctor," he said.

Ms Norwell said when sales volumes started to slow, one would expect prices to also start decreasing. But as vendor expectations around pricing had remained strong, prices continued to hold up.

"Until supply increases across the country significantly, it is our expectation that prices will continue to increase, albeit at a slower rate than we have seen in the past."


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