The West Coast has defied the house price slump affecting the rest of the country because of the region’s substantially cheaper housing, agents say.
One agent says newcomers escaping high prices and huge debt in the cities have been moving south for affordability reasons – and the city’s loss is the Coast’s gain because among the mix are plumbers and electricians along with doctors and nurses, representing some professions in short supply.
Figures from OneRoof and its data partner, Valocity, show property values in West Coast have continued to grow in 2022 – whereas values in every other region have fallen.
West Coast’s average property value jumped 12.3% ($46,000) to $421,000 in the 12 months to the end of November – and while that number may seem small, it stands in stark contrast to the $200,000 drops seen in Auckland and Greater Wellington.
Start your property search
Kevin O’Donnell, business owner for Harcourts West Coast, says the reason is simple – even with price drops around the country the price for a house in other areas is still so high people can’t afford one, especially in the big cities.
“The OCR has just gone up by another .75 basis points so people are really, really struggling around the country in areas where housing is a lot more expensive than on the West Coast.
“I think what you're finding now is people are understanding, and I'm not going to just say the West Coast here, there are other regions that are also being affected by this around the country, but they are the regions that have predominantly been, shall we say, more affordable, which of course the West Coast is one.”
People have identified they don't need to be living in the big cities anymore and realise they can either work from home or seek employment in their new town, he says.
“They're selling up properties which compared to West Coast prices, for example, are a hell of a lot more expensive.
“They are coming to the West Coast, buying property that is a lot more affordable than where they are and downsizing their mortgage to a great degree if not, in fact, in a lot of cases actually being able to come here, buy a house, and be freehold.”
O’Donnell says a lot of people have come from the North Island, Marlborough and even Canterbury to towns like Greymouth and Hokitika and while some are retirees the majority are in the 25 to 55 age bracket looking to shoulder less debt.
“Electricians, plumbers, doctors, nurses, just a varied range. If you’ve got a $550,000 to $600,000 mortgage in Auckland, if you look back 12 months ago you were probably paying $14,000 to $15,000 a year in mortgage repayments.
“Now, with the increased interest rates, that figure has now gone to $40,000 – it’s pretty scary stuff.”
Further north on the West Coast, in Westport and the Buller area, Charlie Elley, manager for Westport Property Brokers, says property is in a holding pattern but he expects prices to rise rather than fall like the rest of the country.
“When the market quietens down here if anything activity drops but prices don't drop with it.”
The view over Greymouth. Agents say $400,000 can get you a very nice home in the region. Photo / Getty Images
Even so, the area is still “hundreds of thousands of dollars” away from the average sale price elsewhere no matter how low prices drop, he says.
Nine hundred thousand dollars on the Coast gets a brand new, highly spec’d, large property on a large section in his patch, Elley says.
“It will get you an executive home, and that’s an average home anywhere else.
“For people looking at retirement we are listing newly-built properties, two-bedroom, some of them duplexes but freehold, very modern in their specs, for around $450,000.”
For $414,000, the average West Coast price since the peak of the market, people can get a “very nice, average Kiwi home”.
Most sales are to people from outside the district who capitalise on the value of their existing homes, sometimes gaining a “huge” differential on what a home in somewhere like Westport might be asking.
“They’re making a huge amount of capital - I actually think if anything it will encourage the growth for the West Coast.”
However, while employment in mining is again strong, and thus the local economy strong, the big flood of 2021 attracted negative media and flood protections are still due to be put in.
When that happens, Elley again expects prices to rise: “The thing with us here is we went from one of the fastest growth areas to basically on hold.
“The only time prices drastically came back was during the mining crisis of 2012 to 2017. That was a five-year glut of coal that was dumped on the world by China.”
Sharyn Overton, a residential and lifestyle specialist for PGG Wrightson, also says the West Coast’s stability comes down to the affordability of the area.
“People can get more for their dollar I guess and so that’s the reason. We have people from all over the country wanting property here.”
Since Covid people have decided they can spend less but have some land and some chooks, she says.
Out of towners like lifestyle properties where the average nationwide price can nab a pretty special property down south, with $700,000 or $800,000 buying a great house on a few acres: “A new home, four-bedrooms, en suite, nicely landscaped gardens, or a new house with maybe huge, big sheds, something like that.”
People paying over $1m could pick up a big house on 10 hectares possibly with sea views.
Overton has heard of only one person moving to the Coast then finding it a bit wet and heading off to Australia, saying most people have no regrets.
“People that come here seem to love it; they’re glad they’ve come down here.”
