Bruce Morris finds a town of faded glory where freehold property sells for less than most Aucklanders spend on annual rent.
For Aucklanders needing to scrape together a deposit of around $100,000 to buy an "average" house in the city on an 80 per cent mortgage, it almost defies belief that a property in the King Country sold not so long ago for just $15,000.
Let's get that in perspective: the
annual rent you'd pay in Auckland for a 30sq m studio shoebox would cover the freehold cost of the whole shebang for a run-down cottage on a lump of land in the tiny town of Matiere.
Matiere is like dozens of other rural communities throughout New Zealand, where heartland pride of 50, 60 and 70 years ago has been extinguished. Where once families were raised and everyone worked, now there is nothing.
At its peak in the 1920s and 1930s, Matiere had a population of 750, built on saw-milling and farmers breaking in land. Road gangs, railway workers and coal miners helped to create a pioneering town with a commercial heart that at various times included dairy factory, three general stores, two butchers, two drapers, a tailor, bank and post office.
The decline triggered by World War II gained more momentum in the 50s and 60s as the saw mills, dairy factories and coal mines closed and better roads created more opportunity at Taumarunui, 35 minutes away.
Today, Matiere is ghost town, though still with a primary school, now in its 105th year with a 2011 roll of 19.
Perhaps there are 30 houses sprinkled through the village, and the rules of supply and demand work here as they do anywhere. The railway's gone, finding work is impossible, no one wants to live in Matiere. If you own a house there, you probably have a liability rather than an asset - reflected in the local council rating valuations where CVs of $18,000 and $20,000 are common.
For all that, the buyer who bought in Phillips St last October will probably have a fair investment. The cottage had tenants immediately before the sale and is apparently quite habitable, though it has seen better days.
In rough terms, even a rent of $80 a week (half the standard weekly outlay of Taumarunui) will return the capital in four years, though rates, maintenance and other expenses will push things out a little, of course. But at the price paid, that sounds like potentially a fair investment over a five-year term. Surely someone would want to buy it then at $12,000. No? How about $10,000?
Down the road in Taumarunui, the town is hanging in. But it, too, is suffering the malaise - some would call it tragedy - of provincial New Zealand: no jobs, high unemployment, declining population and all the social upheaval that flows from those indicators.
It all adds up to pressure on house prices and values are down over 16 per cent in the past two years. It's no surprise to find five Taumarunui properties featuring in the list of the lowest North Island sales of the last six months, with one at just $33,000.
Still, someone is buying: an Australian investor has lately seen value in the town, buying four properties and enjoying a gross rental yield of more than 8 per cent at an average value of around $100,000.
Bill Fouhy, who runs the local Century 21 franchise operation, would love retiring Aucklanders to follow the lead - sell in the city and, for around $200,000 to $250,000, buy one of the nicest homes in town.
With an average house price of $104,000 in QV's latest assessments, Taumarunui offers great sport in its backyard, everything from skiing 45 minutes away at Ruapehu to one of the best provincial golf courses in the country. It's 35 minutes to Lake Taupo's trout and handy enough to Hamilton and Wanganui for a day-return shopping spree. On top of all that, says Fouhy, it's a welcoming town with a community spirit.
How the good people of Matiere and Taumarunui must look at the data produced in this quarter's Property Report and try to understand Auckland values.
A quarterly high of $7.55 million for one sale in St Heliers must seem ludicrous - enough to buy 70-odd average homes in Taumarunui. It's a graphic reminder of the growing gap that's emerging in New Zealand society and, in real estate terms anyway, will only get wider.
SIX MONTH HIGH-FLYERS
1 St Heliers Bay Rd, St Heliers $7.55m ('08 CV: $6.55m)
2 Portland Rd, Remuera $7m ('08 CV: $5.65m)
3 Victoria Ave, Remuera $6m ('08 CV: $6.27m)
4 Remuera Rd, Remuera $5.94m ('08 CV: $4.61m)
5 Minnehaha Ave, Takapuna $5.675 ('08 CV: $6.1m)
6 St Stephens Ave, Parnell $4.9m ('08 CV: $4.42m)
7 Rawhitiroa Rd, Kohimarama $4.15m ('08 CV: $3.24m)
8 Westbury Cres, Remuera $3.8m ('08 CV: $4.55m)
9 Takutai St, Parnell $3.7m ('09 CV: $3.64m)
10 Arney Rd, Remuera $3.5m ('08 CV: $4.39)
SIX MONTH CELLAR-DWELLERS
1 Phillips St, Matiere $15,000 ('08 CV: $18,000)
2 Golf Rd, Taumarunui $33,000 ('08 CV: $57,000)
3 Mawhitiwhiti Rd, Normanby $36,000 ('09 CV: $47,000)
4 Matai St, Murupara $40,000 ('10 CV: $50,000)
5= Norfolk St, Patea $45,000 ('09 CV: $53,000)
Miro St, Taumarunui $45,000 ('08 CV: $89,000)
Queen St, Dannevirke $45,000 ('08 CV: $64,000)
8 Harvey St, Taumarunui $48,000 ('08 CV: $83,000)
9= Sir William Hale Cres, Moerewa $50,000 ('09 CV: $45,000)
Cross St, Taumarunui $50,000 ('08 CV: $95,000)
Makere St, Taumarunui $50,000 ('08 CV: $79,000)
Thrush St, Taihape $50,000 ('08 CV: $45,000)
* Lists feature the top 10 and bottom 10 sales by value in the North Island in the six months to March 31, 2011. Source: QV. "Non-market" sales, like mortgagee sales, sales within families and transfers to family trusts, are not included.
* From the New Zealand Herald's quarterly 'Property Report' - a guide to house prices and great places to live.
