In Southland, the residential market has slowed right down but values are so far holding up for the most part.
The average property value is sitting at $528,000, according to the latest OneRoof Valocity house value figures.
That’s a -0.6% drop quarter on quarter, but year on year prices were up 12.6%.
But agents say the relatively low prices at the bottom of the South Island are proving attractive to North Islanders looking for a change of pace.
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The most southerly listing on OneRoof, a parcel of land on Stewart Island / Rakiura, is one such property.
Harcourts agent Gus Dermody says the 40 acres of freehold land had been bought about 12 or 15 years ago by a developer who had planned to build some baches on the property but whose plans never went ahead.
Dermody is marketing the property as having “endless possibilities” including perhaps a solar farm, saying Stewart Island/Rakiura is having problems with its power supply.
There is an offer on the land subject to due diligence by a couple from Auckland but Dermody says he’s not sure what their plans are.
If the deal goes through, they will have bought the southernmost piece of private land available, he says. “There's less than 5% of Stewart Island that is actually for public use; the rest is National Park or owned by Maori,” he says.
Auckland Islands aside, the next stop is Antarctica, but while it can be cold, the island is surrounded by sea so is more temperate than some places.
Stewart Island / Rakiura is not cheap, though. Dermody, who is based in Invercargill, says islanders tell him it costs 30% more to build on the island than on the mainland.
The agent has three other sections for sale on the island but they are smaller, from 1000sq m to 1500sq m, with price expectations of $500,000-plus.
Forty acres of coastal land for sale at 130 Horseshoe Point Road, on Stewart Island / Rakiura. Photo / Supplied
Interest has come from around the world, he says. “We've had interest from 26 different countries, from the UK right through Spain, Portugal, South Africa, Chile, Brazil, the states, Canada, Australia. All over the place.”
These are inquiries which show up as hits on the listing, but Dermody has also had email inquiries which have had to be translated into English. He thinks people are interested because they view the island as a safe space, especially given the conflict and unrest in other parts of the world.
Dermody’s view on the market in Invercargill is less bullish. “All the borrowers are waiting on the sideline to see. They don't want to pay for a house today that's worth $650,000 and a month later it's worth $550,000, so they're standing on the sideline really,” he says.
“With real estate it goes up and down like the waves between Invercargill and Stewart Island so if you time your run right and buy in a low and sell in a high you're doing OK.”
About 25km south of Invercargill, in Bluff, Brendan Libeau from Todd & Co, has a quirky character home on offer on Athelney Street for $320,000.
Libeau says the seaport town on the bottom edge of the mainland is certainly quieter than it used to be. “Southlanders like to hibernate in winter, and things have gone a little bit quiet over the last couple of months,” he says.
“However, over the last probably two to three weeks we've actually seen quite a pickup in confidence overall. I don't know whether that is relating to the interest rates that are going up, so people are thinking maybe they need to get in now and get a property.”
Libeau also gets inquiries from Aucklanders and says out-of-town enquiries account for about 40% of total enquiries. That’s probably because of the low price tags, such as the one for the Athelney property, which is almost like the amount needed just for a deposit in Auckland.
A charming home at 36 Athelney Street, in Bluff, has a $320,000 price tag. Photo / Supplied
This two-bedroom home at 179 Centre Street, in Heidelberg, Invercargill, is seeking offers over $335,000. Photo / Supplied
“That property has actually got one of the biggest quarter acre sections that you'll find in the Bluff,” he says.
The house radiates character, with its colourful exterior and playful internal rooms, and that’s Bluff, Libeau says. “I think Bluff in general has got a little bit of a quirky, arty sea town kind of vibe.”
The last couple of years have seen people looking at the town as more of a holiday place destination.
Libeau thinks that will continue, with some properties at Riverton, on the other side of Invercargill, getting up to the $1m mark.
“Whereas Bluff, I see it as the next up and coming. It's going to be the next place where everyone wants to be because it's by the water so when all the other places have become unaffordable Bluff is the next best little option.”
That makes properties like Athelney Street good buying: “It's a good price, especially when you consider what people are paying up in Auckland and all that kind of thing – it puts it into perspective doesn't it,” he says.
Monica Cairns, the Southland franchise area owner for Tall Poppy, says listing stock numbers are much higher for Invercargill than they were – about 340 now compared to about 170 mid to end of last year – but people are slower to buy.
That’s probably due to a number of reasons, such as the CCCFA, interest rates and cost of living, she says.
Nobody is in a rush to purchase any more; buyers are being much more considered when looking for a property. “They’re looking for more value as well because of everything else going up around them I would assume.”
She is telling vendors there’s no more “crazy money” out there such as that seen in the last quarter of last year.
A lighthouse on the Bluff coast, at the bottom of the South Island. Photo / Getty Images
That doesn’t mean there is no interest, with a lot of inquiries coming from the North Island. “One of my colleagues, he's actually dealing with about four or five different buyers at the moment that are all Auckland.”
While Southlanders might not be paying crazy money for properties, the prices for properties might still be viewed as crazy by an Aucklander.
Cairns is selling a two-bedroom art deco cottage for inquiries over $335,000, which has had strong interest.
“It's very cute. It's been rewired, fully insulated, it's got a new heat pump, it's been redecorated throughout by the current owners.
“It's on a potentially subdividable section, it's got two garages, so, yeah, good value for money that one.”
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