Following months of booming property prices in Auckland and Christchurch, it appears that homes in some coastal areas of New Zealand are now also starting to attract increased interest that could ultimately lead to increasing house prices.
According to a new property report in NZ, some popular coastal areas for second home owners, including Whangamata and Rodney North, have recorded significant increases in the number of properties being sold in the past few months. This is seen as a hugely positive trend following more than five years of house price declines and stagnant purchasing activity in many such coastal areas.
“We get feedback from our agents around the country regularly and those who are in those regions are reporting, really over the past six months actually, some positive signs,” explained Helen O’Sullivan, the chief executive of the Real Estate Institute of New Zealand. “Not so much prices going up but more people interested in transacting … and a sense of reality on the part of vendors who are realistic about the market. It is improving from quite a dire position,” she added.
According to O’Sullivan, it will take property prices in coastal areas a long time to reach the levels they were at prior to the house market crash in 2007. Prices in many coastal areas had risen at record levels in the early noughties as many Kiwis and overseas buyers sought to purchase second homes as an investment at, what were initially, low prices.
“I think people are now buying it [coastal properties] when they are in a situation to afford another property as opposed to a speculative short-term buy which I think was driving some of that activity in 2007,” said O’Sullivan. “So it had quite a long way to come down, because it had moved so far up in the peaks.”