Exodus hits rural house prices

Photo / Herald on Sunday

Property values dropping in isolated areas while popular parts of Auckland experience double-digit increases.

Isolated and non-metropolitan areas of New Zealand suffered big falls in property values last year as people continued to flock to the main centres.

Latest data from QV showed the biggest falls in Westland (6 per cent), Wairoa and Gisborne (5.3 per cent), Kaipara (4.3 per cent) and Waitomo (2.5 per cent), while values in Auckland and Christchurch surged, in some cases above 13 per cent.

Nationally, the average value rose 5.7 per cent in the past year and 1.5 per cent in the past three months alone.

Westland - which takes in Hokitika - has an average property value of $217,054 and PGG Wrightson agent Peter Henderson said it was hard to sell houses. He has sold only one house in the year he has been working in the sector. "There's no job shortage and plenty of work in dairying and farming," he said.

Not enough people were moving to the area and speculation that many Canterbury earthquake victims would cross the Southern Alps was largely myth, Mr Henderson said.

Wairoa's average value is $149,141, Gisborne's $222,216, Kaipara's $307,421 and Waitomo's $146,364.

QV research director Jonno Ingerson said a few areas had falling values. "It's entirely going to be driven by what's happening in the local economy.

"Westland is being hit hard by the mining closures. Gisborne probably had a bit of an inflation effect prior to the boom of 2007 and since then, there hasn't really been an increase. Prices are correcting within the local economy to boost it back again."

Kaipara suffered higher unemployment and the holiday-home market boom that once held the area up was not continuing to do so, Mr Ingerson said.

The increase in national values was predominantly driven by Auckland and to a lesser extent Christchurch.

"These were also the only two areas to have consistently increased, while the rest of the country varied throughout the year.

"The year began with the number of sales in January 29 per cent higher than the previous year, the highest January since 2008.

"The trend continued throughout the year with most months 20 per cent to 30 per cent higher than 2011 and higher than any year since 2007," he said.

Auckland's most spectacular rise of 13.5 per cent was in its city south area, which Mr Ingerson said included Mt Wellington and Onehunga, and was the result of properties there being slightly more affordable so extremely popular.