Southland property value growth the highest in the country

Sunday, 14 July 2019

Southland property value growth is the strongest in the country, according to Real Estate Institute of New Zealand's latest report. [File photo]

Southland had the highest property value growth in the country last month with dramatic growth shown throughout the district.

The Southland region reported a property value growth of 20.2 per cent in June this year, up from an annual increase of 10.5 per cent in June 2018, in the Real Estate Institute of New Zealand monthly property report.

The house price index for Southland showed the strongest movement for one, three and 12 month periods across all regions.

The median house price for Southland was $285,000 for June, which was up 14.5 per cent from June last year.

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The Southland District showed a dramatic increase of 41 per cent in the last year with a median house price of $416,000.

National property values have continued to fall with a decline in the rate of annual growth from 3.8 per cent in June 2018 to 1.7 per cent in June 2019,

The Waiau Aparima ward, which covers areas from Riverton to Tuatapere and as north as Ohai, showed an increase of 165 per cent from a median house price of $115,000 in June last year to $305,000 to June this year.

The Winton-Wallacetown ward had the second highest growth for the region at 27.4 per cent, with the median housing price moving from $295,000 in June last year to $375,000 in June this year.

REINZ chief executive Bindi Norwell said 'over the last two years, Southland has only seen two months where the region hasn't experienced double-digit year-on-year growth.

'With such strong level of growth for so long now, this is certainly an area to watch over the coming months.'

One of the reasons for the strong growth was that the region was still perceived affordable compared to other regions in the country, Norwell said.

More affordable regions were growing rapidly and Southland's property value would likely continue to increase as it caught up with house prices of other areas in New Zealand, she said.

While Southland District had showed strong growth it was important to note that smaller volume areas can in fluctuate numbers, she said.

In the Waiau Aparima area it was a few houses that sold for more than $400,000 that created the large increase, she said.

Invercargill had a higher volume area and it's growth of 20.4 per cent [during the same time frame] was a good indicator for the region, she said.

Infrastructure and new development were also causing property growth along with the region providing steady employment, she said.

Along with most areas in New Zealand, Southland also had a housing shortage as another cause of the property value growth, she said.

From REINZ calculation the Southland region was about 3700 houses in deficit, she said.

The report also showed days to sell was at 29 days in June, a decrease of 10 days compared to June last year.

Harcourts Invercargill manager Wayne Ellis said the decrease could be because of there being more 'qualified buyers' on the market.

More buyers were doing their research which meant that when they saw a house they wanted to buy they were ready to act, Ellis said

Last year, the Southland Housing Action Forum was formed to address housing shortages in the region.

Forum chairman Shaun Drylie said that the property value growth showed a lack of supply of houses and an increase in demand.

The statistics showed that the forum had more work to be done and the group was looking to secure someone who was solely focused on the project, Drylie said.

The forum was working on encouraging investors to build more houses along with working with community groups such as Habitats for Humanity which recently bought Kew Bowl , he said.

While Kew Bowl could build 20 to 30 mixed social and affordable housing, the forum estimated 140 houses were needed at the social and emergency end, he said.

When SHAF was formed last November they estimated that 2800 homes needed to be built within the next year and 500 homes each year for five years after.