NZ's highest growth towns and suburbs
The housing boom is turning many country towns into real estate hotspots as home buyers search for cheaper alternatives to skyrocketing city prices.
Figures compiled by the Sunday Star-Times show the country's hottest residential property market is in Foxton, a small North Island town 20 kilometres north of Levin.
According to figures from the Real Estate Institute of New Zealand, the median selling price of homes in Foxton was $180,000 last month, a massive 59 per cent increase on the $113,500 median price in November last year. Over the same period the number of homes being sold in the town has more than doubled.
In the 12 months to November 2011, only 34 homes were sold in the town, but in the 12 months to November this year the number of sales jumped to 77. The figures do not appear to be an anomaly.
Also rating highly on the Sunday Star-Times' list of top-20 real estate hotspots were nearby Foxton Beach and Waikanae Beach.
Other small towns to feature on the list were Arrowtown and Darfield in the South Island, Helensville on Auckland's northern outskirts, and Oneroa on Waiheke Island.
Given the way the Auckland property market has grown this past year, it is surprising that only four central suburbs made the list: Mt Roskill, Parnell, Grafton and Epsom.
To be included on our list, suburbs or localities had to have recorded an increase in their median price of at least 30 per cent between November 2011 and November 2012 and a minimum 30 per cent increase in the number of sales in the 12 months to November (refer to graphic for the full list).
That made those locations true hotspots because not only were their prices rising strongly, so were the number of homes being sold, meaning the overall real estate activity in these areas was outstripping activity in other parts of the country.
Over the same periods, the national median price increased by 4.3 per cent, while the number of homes sold increased by 8.2 per cent.
REINZ chief executive Helen O'Sullivan said for sales activity in towns like Foxton to increase so much in a 12-month period was "quite remarkable".
"We are seeing a lot of what are called displacement effects, where people say, ‘OK, I've got $400,000 to spend, what can I get for that'," she said. That included looking at options outside of the main centres and weighing up the pros and cons.
"People are prepared to make more of a compromise on things like travelling times in order not to have to compromise on space," O'Sullivan said.
That was often helped by the fact that many employers were prepared to help with flexible working hours, which allowed people to avoid rush-hour traffic when they needed to commute into the city, and the growth of technology which allowed people to work from home, she said.
O'Sullivan does not see the current property boom changing much in the coming year.
"It's going to be interesting. In Auckland and Christchurch, supply issues are going to continue to be a problem."
She said that over the five years from 2003 to 2008, the number of homes sold each year was equivalent to about 6 per cent of the total housing stock but now it was running at only 4 per cent.
O'Sullivan said she expected the housing market to continue to firm in 2013, "but probably at a slightly slower pace".
SMALL-TOWN TIME WARP
Wendy Voyce was spending as much time out of Palmerston North as she could. The weather was getting to the mother-of-three. The cost of living was getting to her, too; and the children, she thought, were not as happy as they could be.
She had lived and worked in the North Island city for years but last December, after increasingly heading to the beach for the weekends, Voyce started wondering why they didn't just pack up and leave. There was good weather at Foxton Beach. There was great fishing and friendly people too, she said. Whenever she went into a shop they seemed glad to see her. It was almost like a time warp - one with wonderful sunsets and million-dollar views.
"But you're not paying for them. Why wouldn't you move?"
Last December she answered that question definitively. The family sold their three bedroom home in Palmerston North for $280,000 and bought a much larger two-storey home on 800 square metres for $60,000 less.
Voyce said the kids were now happier, her partner commutes the short 30 minutes to Palmerston North and she still felt like she was on a holiday. "There is so much to do here but it is back to basics."
Instead of trips to the mall or paying for go-karting and 10-pin bowling, they go walking in the forest or searching for tadpoles.
Voyce's decision has helped boost the country's residential market. According to data from the Real Estate Institute of New Zealand, crunched by the Sunday Star-Times, smaller cities and towns have increasingly turned up in the top places in New Zealand for increases in sales and year-on-year price increases.
Over the past year, both Foxton Beach and Foxton have seen big increases in the number of residential sales and the prices paid for them. The trend is echoed in many towns on the outskirts of larger metropolitan areas.
Owner of Ray White Foxton, Ellen Graham, said the location was previously known as a gang town. Now, however, it was seen as a place for both commuters and retired farmers looking for a simpler life.
"I've been selling crap out there which is crap but people want to pay half a million," she said. Members of the older generation who had held on to sections they bought for $30,000 can now sell them for $400,000.
Amanda Street, who was born and bred in the area, bought her first house in the early 2000s for $73,000 and sold it five years later for $180,000. Now she is selling subdivisions on a larger property she bought with the profit from that first acquisition.
"You can buy at a reasonable price, earn the city money, commute and live at the beach," she said. "I'm only leaving here in a coffin."
Helensville, 40km north-west of Auckland, has also seen a boost in sales.
Mark van Lent, Helensville manager for Barfoot & Thompson, said the prices in central Auckland had helped push families further out.
"You can still buy a reasonable three-bedroom home in the $300,000s [in Helensville] and it's not that far out."
For many families who worked on the North Shore, 35 minutes away, it was a more attractive option, he said.
"It's to do with affordability."
In Darfield, Canterbury, the Christchurch earthquake was behind a similar trend. Some had come from the city but others were transferring from as far away as Auckland for a different and cheaper lifestyle, said Devlin Real Estate sales representative Annie Smith.
"There is an awful lot of unknown and they like to go to something that is quite solid."
Christchurch Airport was only about 25 minutes away, and Darfield was a good alternative for people who did not want to live in a big city.
"It is unseen and unspoiled. Whereas Rolleston and Rangiora had an immediate boost after the earthquakes and are now seen to be a bit overcrowded, we don't have that in Darfield.
"We are still seen as rural."
Sunday Star Times