Rocketing prices, a shortage of stock, and soaring demand have whipped the Nelson-Tasman housing market into a frenzy, experts say.
Real Estate agents have described the region’s property market as “ballistic”, “nuts”, “uncomfortable” and a “perfect storm”.
But everyone’s careful not to use the word “crisis”, which has come to define the New Zealand housing market this year, particularly in Auckland.
“Crisis comes down to somebody’s ability or capacity to be involved in the market,” Haven Realty salesperson Darryl Marshall said.
“So it’s a crisis if you can’t afford to get in the market and you’re continually having the opportunity moved away from you.”
Marshall said the number of people who fall into that category in Nelson-Tasman was not as high as in Auckland, Wellington or Christchurch.
“But there are still people that are finding the marketplace very hard to get into.”
Marshall has worked in real estate in the region since the 1970s and said the heat in the market over the past 12-18 months was unprecedented.
So what’s driving it? “Without being cute about it,” Marshall said, “every market is to do with supply and demand.”
House listings in Nelson-Tasman have dropped significantly while demand has surged, causing prices to soar well above outdated rateable values.
Demand has been stimulated by historic low mortgage interest rates, meaning more people can afford to borrow; a major shortage of housing stock in the region; population growth; and investors.
Improved access to the region with more airlines, flights and visitors was also having an impact, Marshall said. Holidaymakers – both domestically and internationally – were being converted into home buyers.
The manic housing market in other parts of the country was also seeing people priced-out of places like Auckland looking to Nelson-Tasman as an attractive location to live, raise families, and do business.
As a result, the median house price in Nelson hit $450,000 in June – a record high, up from $360,000 a year ago.
Nelson’s median house price dipped in July, but the Tasman District has continued to charge ahead with Richmond and Motueka cracking $500,000.
Agents said competition in the market was hotter than ever with houses, particularly those in the low-median price band, attracting multiple offers with minimal, or no conditions.
The battle to buy a house has seen some people priced-out of the market, particularly young, first-home buyers who have to compete with cashed-up investors.
Despite record prices across the region, home owners have been reluctant to sell to avoid having to buy in the same market.
However, sellers were benefiting from strong demand, quick sales, and competitive offers.
Demand for new subdivisions and townhouses was also strong with waiting lists for some new developments.
Since the 2007 peak, house values have increased 21.4 per cent in Nelson and 13.9 per cent in Tasman, QV Nelson valuer Craig Russell said.
“This is a different picture to what is being experienced in Auckland which has had value growth of 81.6 per cent since the 2007 peak.”
Russell said there was a “housing crisis” in Auckland which has the potential to flow onto Nelson-Tasman.
“I don’t know if it’s a crisis in Nelson as such,” Total Realty sales consultant Simon Collins said.
“But I would say I’d call it uncomfortable.”
Most experts predict steady growth to continue in the region, but Bayleys agent Bruce Farquhar said the “market frenzy” will slow down eventually.
“The only unknown is not will it happen, but when it will happen.”
– via Stuff