If you are prepared to move out of Auckland, you can free up hundreds of thousands of dollars to fund a business, retirement or a slower pace of life.
If you are prepared to move out of Auckland, you can free up hundreds of thousands of dollars to fund a business, retirement or a slower pace of life.
Auckland real estate prices may be cooling, but the regions are seeing a welcome change in fortunes, writes Lawrence Watt.
A friend sold her Takapuna town house and used the money to buy two houses, one on Waiheke Island and a winter pad in Ohakune. She has freed up cash, allowing a slower lifestyle for retirement.
With the average house in a middle class suburb such as Blockhouse Bay nowvalued at more than $900,000, Auckland homes are 'worth' three times as much as those in regional centres, twice as much as in Hamilton or regional Wellington, and five times as much as leafy Wanganui.
If you are prepared to move out of Auckland, you can free up hundreds of thousands of dollars to fund a business, retirement or a slower pace of life. You can kiss goodbye to the mortgage, buy a lifestyle block, set up a bed & breakfast and still be cash rich.
Having just returned from a tour of the North Island, I visited almost every large town or small city from Wellington to Whangarei. I met people ranging from Gisborne-loving Canadian migrants to an Aucklander looking at farms. So where is the best place to buy?
Coastal Napier, with its beautiful foreshore and vineyards was very appealing. Napier is as cheap as chips compared to Auckland, but recovering. Average home are $335,443 says Quotable Value (QV), almost a third of average Auckland prices.
Hawke's Bay property has been rising, by 2.2 per cent in Napier and 6.1 per cent in Hastings (including Havelock North) in the past year -- the latter not far behind Auckland (7.3 per cent in the past three months).
The cash from selling your Auckland house might buy you an apple orchard. QV Hawke's Bay manager Bevan Pickett estimates pipfruit orchards are worth around $65,000 to $75,000 a hectare, plus the value of buildings and plant, while a quality vineyard might cost up to $150,000 a hectare.
Lifestyle properties are selling well and are following the same trend as residential properties, particularly those close to town. Those more remote often struggle to get offers and tend to sit on the market for longer.
Hawke's Bay is in the early stages of a recovery. Sellers of orchards have been reluctant, given many years of a market trough. Pickett has noticed lifestyle and working orchards have been worth the same, until recently. But now the market is in a state of change. Agents have cut commissions to get business.
Pickett says Aucklanders and other out-of-town buyers are pushing up prices -- and locals are meeting the market.
North of Auckland is also a pleasant place, with warm weather, good beaches and fishing spots. Whangarei property prices are rising, too, (7.6 per cent in the past 12 months) although they are still 8 per cent below the former 2007 peak. The average value is $364, 728.
Warkworth, 40 minutes from a job in Takapuna, says Google Maps, will seem closer when the 'holiday highway' is completed one day. The completion date has not been announced, says the Transport Blog, but contractors have been shortlisted. It may still be surprising to see that the average Wellsford value is up over 65 per cent in just three years, to $375,950 in June.
The property boom looks like it is continuing to spread. The regions are getting their place in the sun for a change.
In general terms, many places furthest from Auckland, such as Invercargill ($214, 023) and Gore ($185,129) have the cheapest properties. The winters are cold and the Bluff aluminium smelter, worth 10 per cent of Southland's economy, may close down. Long term job prospects don't look good.
For a capital gain the best place to buy may be relatively close to home. Values in Hamilton, up 18.2 per cent in the past year are now rising faster than in Auckland, a sign that we 'Jaffas' are looking south.
QV Valuer Chris Price notes investors have been hunting sub-$100,000 investment properties in Tokoroa. Tauranga also shows some sign of catching up, (up 10.2 per cent in the past three months.). QV says the boom has pushed out to smaller places such as Cambridge, Waipa and even Te Awamutu, a 30-minute commute from Hamilton.
There is another side of the coin. Pickett says the reason why Blockhouse Bay costs three times as much as Napier is jobs. Unemployment in Hawke's Bay and Gisborne, have recently been about 2 per cent higher than nationally. Even so, Pickett reckons ex-patriots move back to the bay to live with family and accept lower pay than in Auckland.
The property boom looks like it is continuing to spread. The regions are getting their place in the sun for a change.
