Nearly a year after the first Covid lockdown, Gisborne has emerged as New Zealand’s hottest property market.
Nine suburbs in the city make the top ten list for house price growth, according to the latest housing market figures from OneRoof.
READ MORE: Find out if your suburb is rising or falling
House values in these suburbs were more than 34.8% up on pre-Covid levels, with homeowners typically enjoying between $110,000 and $225,000 boosts to their property values.
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Gisborne is the strongest performing region overall, with its median property value 35% up on pre-Covid levels - a level of growth that's almost 14 percentage points ahead of the next best TAs.
Value growth at a suburb level was strongest in Kaiti, just east of Gisborne's city centre. Prices in the suburb were 43.1% up on pre-Covid levels, with median value now sitting at $410,000. A year ago it was just $290,000.
Outer Kaiti was up 35% to $375,000 - the only Gisborne suburb with a value below the affordable $400,000 line. Before Covid, nine suburbs were in that bracket, and five years ago there were 15.
Also growing 35% were Elgin ($440,000), Gisborne central ($480,000), Mangapapa ($540,000), Inner Kaiti ($620,000) and Riverdale ($645,000).
In the more expensive parts of town the 35% increase took the median value of Okitu to just short of $1 million while Lytton West jumped to $880,000. The analysis doesn’t include suburbs with fewer than 10 sales in a year when Waerenagaahika recorded a top sale price of $2.15 million.
James Macpherson, Bayleys principal for Gisborne, Hawke's Bay and Wairarapa, told OneRoof: “Gisborne is catching up, there’ll be million-dollar suburbs soon.
“Now the population is growing after dropping in the 1990s, there’s a shortage of good housing and there have been no major new subdivisions for 15 or 20 years.”
Macpherson sees people “escaping from Auckland and Wellington” for jobs in the booming forestry and horticulture sectors.
“There’s significant work across all the professional spectrum, not just minimum wage labour. They love Gisborne, they can surf at Wainui Beach and still work.”
Macpherson also attributes the significant up-tick in values to the high proportion of homes selling by auction in the area – the highest in the country, according to Real Estate of New Zealand data.
“That allows the market to find its own level, instead of just taking a price. It’s a clear and transparent process, you can have up to 10 bidders on a property,” he said.
While not universal, Macpherson said there were million-dollar plus sales in beach-side suburbs, with top sales over $1.3 million in Riverdale and Whataupoko. He said there was a renaissance around the inner-city area with new builds of four or five townhouses within walking distance of the city centre.
Joe Snee, Property Brokers’ Hawkes Bay and Gisborne regional manager, asked: "Who wouldn’t want to move to Gisborne?”
He estimated that around 30% of sales are to non-locals “drift from Auckland or ex-pats who want to come home”.
Some are bidding from Australia or the UK before they move back, he says, now realising that working remotely is a viable option.
But despite listings being up on last year, Snee said that there were not enough houses for buyers across the board. The company had only 25 properties for sale at their end of February auction, down on 30 for the same month last year or even their first post-lockdown auction in May last year, which had 28 properties.
“Investors were definitely active before Christmas, but first home buyers aren’t missing out to them, they’re missing out because there are 10 offers on a house that used to get two or three.”
In Taumaranui, the only non-Gisborne market to make the top ten hottest suburbs list, Harcourts senior sales consultant Tim Burton said that the town in Manawatu-Whanagnui, formerly just a destination for outdoor holiday makers, was now attracting young retirees.
"The majority of buyers are not working, they are purchasing a property now with their retirement in mind," he said.
"In the interim they're renting the properties out. Taumaranui has always had a strong rental market. There are no bargains anymore, but an investor could pay around $300,000 and get rents in the mid-$300 a week, even heading towards $380, that's a good yield."
Burton said $300,000 to $350,000 used to be good prices in the town but he has recently had offers within a week for a $550,000 house at 49 Morero Terrace, while another at 32 Hall Crescent sold for $500,000 just after auction.
He said buyers were a mix of locals and people moving from places like Hamilton, Whanganui, even Northland because they can get more house for their dollar.
