It’s the country’s second cheapest housing market, where you can pick up a house for around $200,000, but agents report that buyers in Southland are running into the same problems as those in Auckland.
Rich Norris, who manages Bayleys’ Southland offices, says there has been a shortage of supply in the region and cheap money has made the market more competitive.
“All of those things apply in Auckland just as much as they apply here - it's just a different price band,” he says.
According to the latest figures from the OneRoof-Valocity House Value Index, Southland’s average property value sits at just over $500,000, up 21% over the last 12 months and 5.6% over the last quarter.
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Growth, while not spectacular, has been solid, and unlike some other parts of the country, the housing market in Southland is not exhibiting any signs of fatigue, although agents report investor activity has cooled in response to tax changes this year.
Norris says investors in the region have typically been out of towners, and while outside interest hasn’t stopped dead, the investor market has cooled (“It was running pretty hot before that”).
First home buyers, he says, tend to be locals.
The region’s main towns of Invercargill and Gore have recorded significant value growth over the last year of more than 20%, but prices are still affordable compared to elsewhere in the country.
Invercargill’s famous clocktower. House prices in the city have grown more than 20% in the last year. Photo / Getty Images
For first home buyers on the tightest of budgets, there are exceptionally cheap homes on the market for around $200,000, but Norris says you have to shop around for those and they are “rough diamonds”.
“It would be freehold title with a smaller home on it that probably needs a bit of work, but completely liveable - you know, a doer-upper basically.”
People use these properties as stepping stones.
“It’s the same as anywhere else, we've got builders doing them up, we've got people subdividing. The market behaves exactly the same as any other market.”
$235,000 will buy a three-bedroom home in Mataura, outside of Gore, where you still get a modernised kitchen and a backyard.
Over in Invercargill, $389,000 will buy a four-bedroom 1970s brick family home with a new kitchen, while $375,000 could get you a three bedroom entry level family home on a 624sq m section in Gore.
140 Regent Street, in Newfield, Invercargill, has an asking price of $389,000. Photo / Supplied
A three-bedroom home on Kitchener Street, in Gore, has an asking price of $375,000. Photo / Supplied
An expensive home, on the other hand, where you might pay up to $1.5m, will often be a lifestyle block of five or 10 acres with a big home on the outskirts of town.
“And when you say the outskirts of town in Invercargill you are talking 15 minutes commute tops,” says Norris.
Listings at the upper end, which are not priced, include a 1920s four-bedroom, two-bathroom home with a tennis court at 2310A Dipton Winton Highway in Winton, which has a $770,000 RV.
Another property borders the Fiordland National Park which has access to the Waiau River and is a short stroll to Manapouri village, a short drive to Te Anau and a day trip to Milford Sound. Number 11 Murrell Avenue, Manapouri, has a RV of $445,000 and also has a cottage on the grounds, described as a project for the summer.
Norris says the region has a lot to offer. “It's a fabulous lifestyle. We've got beautiful beaches, incredible mountains, Fiordland on one side, the Catlins on the other, no traffic so to speak, and as well as all that there’s work opportunity.
Top end listings: above, 2310a Dipton Winton Highway, in Winton; below, 11 Murrell Avenue, in Manapouri. Photo / Supplied
“There’s staff shortages right throughout the employment spectrum - employers are screaming out for workers.”
Wayne Ellis, from Harcourts Invercargill, says stock is short supply, which is probably pushing prices up.
He also says employment opportunities are rife. There’s a new hotel going up in town, along with a revamp of the CBD which will include a new shopping mall and that’s creating employment and a bit of a buzz and attracting new people into Invercargill.
“I’m hearing there's more and more people out of town who are looking to buy down this neck of the woods, be it Invercargill, be it Te Anau, they are looking at making some changes.”
Ellis says entry level is around $350,000 and you will get an older, solid house with a backyard, whereas in Auckland you wouldn’t get an apartment for that.
Mitre Peak rising from the Milford Sound fiord, in Fiordland National Park, Southland. Photo / Getty Images
“In real terms we're pretty affordable, aren't we?”
Over $600,000 is an executive home and these sorts of sales are becoming more common.
One on the market for $729,000 is in Rosedale which is a great location and is a four bedrooms and two bathrooms. A brand new townhouse in Windsor, another great area, is on the market for $735,000.
Executive homes on the market in Invercargill: above, 28 Lamond Street West; below, 51 Bourke Street. Photos / Supplied
Out of towners recently paid just over $1.4m for a split level refurbished home in Waverly. “Good properties that are presented well are getting some really good attention.”
Ellis expects next year to be a busy one but says supply is an issue and that Southland could do with more new builds.
Well a lot of the country is undergoing a building boom, Southland isn’t – but if there were more properties they would sell in the current market.
”Don't get me wrong, there are some subdivisions but we don't have them probably per capita to the same degree.”
