Property investors and those looking for a change of pace are flocking to the South Island’s West Coast, New Zealand’s most affordable housing market.
West Coast is the only housing market in New Zealand to have experienced relatively steady growth over the past year and agents say it’s being driven by both investors chasing good returns and people quitting city life for the opportunity to be mortgage free.
House prices in the region have grown 66% in the last five years, and figures from OneRoof’s data partner Valocity show it is the only New Zealand region where property values are up year-on-year. West Coast’s housing market had largely dodged the effects of the downturn but since June this year, the region’s average property value has slid, dropping from a peak of $435,000 to $425,000.
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Kevin O’Donnell, business owner of Harcourts West Coast, said house price growth had been driven by strong interest from outside the region.
“If you’re a buyer coming from Auckland, Hamilton, Wellington or Christchurch, you can sell up and buy equally as well if not better and have a lot of money left in your back pocket,” he told OneRoof.
“On the back of Covid, people are waking up to the fact that they can go to the regions and be quite happy in areas that are not as crowded, don’t have the traffic, and have an easier pace of life but they still have good schooling and are big enough to have access to healthcare.”
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He noted that West Coast homes offered investors good returns as rentals and there was significant business investment happening in the region, from retailers like Noel Leeming opening in Greymouth to tourism projects, including the new Paparoa Track, named a Great Walk, the Pike29 Memorial Track and cycle trails.
“We’re one of the only regions in New Zealand that has continued to experience growth. The employment situation is extremely good for doctors, nurses, engineers and contractors and the lifestyle is enviable,” he said.
While sales to investors featured in the $290,000-$450,000 bracket, other homes like a three-bedroom property at 2 Sanctuary Place on a 6420sqm section, between Greymouth and Hokitika, listed at $685,000 had gone under offer at $650,000. O’Donnell said it represented the best bang for their buck that West Coast buyers could expect.
A three-bedroom home at 2 Sanctuary Place, in Kumara Junction, West Coast, was listed in August and at the time of writing was under offer. Photo / Supplied
Ray White Hokitika agent Shelley Bainbridge said while sales had slowed in recent months, there was still good interest from investors.
“We have a lot in the $200,000 mark and rents are between $350 to $450 per week so [investors] can buy them, do the work and rent them fairly quickly for a reasonable return as there is always a shortage [of] rental,” Bainbridge said.
Property Brokers Westport agent Glenys Elley agreed with O’Donnell that interest from outside the region was helping the market, especially at the upper end.
One of her agency’s listings, a three-bedroom home on Lighthouse Road, in Buller, had sold two-and-a-half years ago for $635,000 but was now on the market for $1.25m. Another listing was seeking interest over $1.6m.
A luxury home at 79A Lighthouse Road, in Cape Foulwind, Buller, has a $1.25m price tag. Photo / Supplied
“It’s not just affordable housing that people are coming for and they’re coming from all over New Zealand. Our market is a little bit sheltered. If people are employed and the economy within Westport is doing well the housing market continues to do well,” she said.
She was currently dealing with buyers from Waipu and the Far North looking at properties in the area and didn’t expect demand to abate in 2024.
“Most people are coming because it’s a smaller place and they love it. I think that Covid had a dramatic impact on people, and they are moving here looking for a more work life balance. They like the fact that they finish at 5pm and be home in 10 minutes. They are driven by a change of pace and the affordability.”
She was also marketing a license-to-occupy beachfront property on Beach Road Charleston with a guide price of between $125,000 and $199,000.
“On the Thursday it was listed I had 15 enquiries and only one was local. Most people, if they come to the West Coast, end up mortgage free or with a very small mortgage of $30,000 to $40,000. It represents value and a lifestyle you just can’t get in the bigger centres.”
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