$3m and your neighbours are hobbits

The property slump may be pushing down prices in many parts of New Zealand, but in “Hobbit” country agents report that strong demand at the top end of town is keeping the magic in the market.

The latest figures from the OneRoof-Valocity House Value Index show an 11% ($87,000) lift in house prices in Matamata-Piako in the last 12 months, and although there has been slight decline in the most recent quarter, it is small in comparison compared to those in neighbouring Hamilton and NZ’s other major metros.

In Matamata itself, the average property value has jumped 13% ($106,000) year on year to $872,000. Value growth in neighbouring Te Aroha has been even more impressive - 17.8% ($117,000) to $776,000.

Harveys Matamata real estate agent Alan Griffiths says the surge reflects an increase in high end sales in the district, while Harveys Matamata principal Jodi Hilliar highlights the growth in subdivisions.

She says visitors to Matamata – known to many as the home of Hobbiton, the movie set and location used by Sir Peter Jackson for his Oscar-winning Lord of Rings and Hobbit movies – are often surprised at just how large and attractive the town is.

“When you show them the different areas that we have in Matamata, and all the new subdivisions they go, ‘Oh, my goodness me Matamata is getting really big’,” she says.

Matamata has proved popular with tourists and out-of-town buyers. Photo / Supplied

At the end of September, 73 new homes, land, or land and home packages were on the market, with the biggest development in play Maea Fields, a subdivision being built on the 230ha Calcutta Farms. Prices for sections in the subdivision start at $300,000, with the developers committed to delivering 280 new homes for the town over three stages.

Hilliar and Griffiths say buyers who don’t want to embark on a build project are turning their attention to nearly new homes, and both expect to see prices rises in this part of the market in coming months.

The pair recently sold a near new home to returning expats for $1.2 million – a price bracket Griffiths says will get buyers the best Matamata has to offer. The buyers, who had been living in the UK, had been touring regional towns and cities as far afield as New Plymouth before deciding on Matamata.

The highest sale in the past year for Matamata was $3m for a lifestyle block on Buckland Road that shares a boundary with Hobbiton. The 360m2 home was a tad bigger than the average hobbit hole, and the 19.7 of land much larger than many lifestyle homes.

An artist’s impression of the news homes planned for the Maea Fields subdivision. Photo / Supplied

Griffiths and Hilliar admit that the challenges affecting house sales in other parts of the country are starting to impact the town’s property market. Buyers from Auckland and Tauranga have been a key part of the town’s growth post-Covid - “they get a lovely house on a lovely piece of land, and still have money in the bank”, the agents say – but they have retreated in recent months.

“I wrote a vendor report about three or four weeks ago. Normally 80% of viewers would be from the Auckland market, but it was down to 30%,” Griffiths says.

One of the issues with the Matamata market currently is that the out-of-town buyers are making conditional offers on properties, wrongly assuming they’ll sell their existing homes at a certain price, says Hilliar.

“We're getting offers on our properties. If they haven’t sold [their existing home] they say this catch phrase: ‘oh, our house will sell really quickly’. But then, three months later, it still hasn't sold. So they have to take a reduced price, which means they come back to Matamata and they ask for a reduction in property.”

In neighbouring Te Aroha, Mike Pero agent Kristy Mikkelsen says an increase in listings and affordable prices have increased the opportunities available to first home buyers.

“A year ago, there were only seven listings in Te Aroha. It was up to 63 earlier this year, and it’s 43 now.”

This three-bedroom home at 77 Whittaker Street, Te Aroha, is seeking enquiries over $539,000. Photo / Supplied

Properties range in price from $500,000 to just over $1m. The cheapest home Mikkelsen has on the market is at 77 Whittaker Street. The three-bedroom house has a business zoning and is seeking enquiries over $539,000.

Mikkelsen recently sold a renovated home on Totara Street, in Waitoa, to first home buyers for $625,000 – almost $200,000 above RV. “Homes in Waitoa and Waihou sell pretty quickly,” she says.

Even problematic properties in the area will eventually find a buyer. Property Brokers sales manager Toni Swney recently sold three-bedroom home that was known to have loud neighbours. “My buyer came along and said, ‘I don’t care. I’ll live in it until I die. And if the neighbours are rowdy I’ll just take my hearing aids out.’”

Stock at top end of the market is also shifting. Property Brokers sold a four-bedroom family home with mountain views for $1.17m in March – more than $100,000 above RV – and Swney has high hopes for a home at 19 Hamilton Street that is about to hit the market.

“It’s 198sqm on 2226sqm of land, surrounded by a goldfish farm. Very quiet neighbours. It has been completely rebuilt from the inside out. Immaculate. The most stunning property that we've probably ever listed,” she says.

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