The scenic West Coast of the South Island remains the cheapest place to buy property in the country, but agents there report that a flurry of buying activity over the past 12 months is pushing up house prices.
The region’s average property value is a low $379,000, a quarter of Auckland’s average property value, and $696,000 below the nationwide average property value.
However, West Coast house values have grown at the same rate as Auckland’s since December last year, and over the past quarter, when some regions have started to show signs of fatigue, has turned solid growth of 6.2%.
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Charlie Elley, from Property Brokers in Westport, says the Coast might be the cheapest in terms of average value but it also offers the best value – plus it’s simply a stunning place to live.
There are some real gems on offer, too, although some are a little quirky.
Take the section Property Brokers is advertising as a seaside retreat on State Highway 6 for $85,000.
“It's an absolutely unusual situation but it is not unsurmountable,” Elley says.
“It's located in what we call the magic mile, so that's between an area called Fox River and Punakaiki.
“There's a stretch of coastline, a beautiful setting with nikau palms, long beaches and gorgeous rugged national park up and behind, and there's a very thin strip of land on the coast proper.”
One of West Coast’s main towns Greymouth has recorded a near-30% lift in house prices over the past year. Photo / Getty Images
There are freehold titles along there including this section but the catch is it has joint ownership.
If you buy, you become one of two owners and you own a 50 per cent share, which is in the title and the value as opposed to the physical size, Elley says.
The million dollar question is whether a buyer could build on the land which is subject to coastal erosion - they would need to be aware they would need to build a seawall.
A number of other people in the neighbourhood have done just that, and a number of them are Aucklanders, Elley says.
Just up the road is a triple ownership scenario where three baches are on one title and that’s worked fine over the years even when owners have changed, he says.
And next door is an Air B&B, expected to come on the market soon, with a similar stunning outlook where the owner built a seawall about eight or nine years ago and has just re-strengthened it.
“The sunsets are phenomenal, the setting is tropical to say the least, it's absolutely rugged and as long as you go in with your eyes open you can make something absolutely spectacular,” says Elley, who thinks perceptions of the Coast are changing, which partly accounts for the price increases seen over the past year or so.
Fox Glacier village is one of the standout visitor locations in West Coast. Photo / Getty Images
“Traditionally, we have always been regarded as like second best, like people only bought on the coast if they had to buy on the coast - there's this generational attitude which is only now finally being seen as not warranted.”
Nowadays, instead of having to defend the Coast people are clamouring to live there.
Like the rest of the country, there is a scarcity of properties and that’s new for the area.
“We’re seeing multiple demand for properties from out of town buyers who are happy to pay at least what the asking price is because they can't believe how cheap it is.”
A good proportion are Aucklanders but there are also people from the north of the South Island and there are many younger retirees moving there.
Elley thinks the Coast, which has a stable economy and good employment, is still under-valued and says what you can get for $373,000 has gone down a bit lately.
For that you could perhaps buy a 1950s bungalow, possibly an ex-state house, which has been modernised inside.
In the past that property wouldn’t have been top of the hit list - “don't expect what you would have got two years ago which would have been a brand spanking new house with two bathrooms and a double garage.”
Kevin O’Donnell, from Harcourts, says “hell, yes” prices have gone up on the Coast and some phenomenal sales are being seen – when OneRoof spoke to O’Donnell he had just made a record sale for a residential home in Greymouth but could not give details.
A four-bedroom home in Kumara is seeking offers of over $629,000. Photo / Supplied
Inquiries from Aucklanders are “massive”, as are inquiries from the North Island as a whole and also people from Marlborough and from parts of Canterbury.
O’Donnell puts interest down to value but also to Covid.
“People have just had a gutsful and that's the commentary we're getting.
“They have realised they can work from home and they can also come down here and seek other job opportunities.
“The dairy factory is still doing well, truck driving, builders, there's all sorts of an array of different industries where the companies are screaming for workers - laborers, drivers, all that sort of stuff.”
The biggest problem is the shortage of listings with lack of supply leading to higher prices.
“But I wouldn't say that's the bulk reason why prices are increasing. I think that people are really seeing value in the West Coast, they are seeing value in the lifestyle.”
The West Coast coastline is one of the country’s most stunning scenic spots. Photo / Getty Images
O’Donnell has lived in a variety of countries and says people ask him why on earth he came back to the West Coast.
“My answer is always the same and that is ‘you've never spent four and a half hours on the 405 outside of LA, or experienced the traffic in Auckland where I lived for two and a half years.”
O’Donnell says retirees make up only a small percentage of his company’s client base.
There are some first home buyers who can’t get into the market in Auckland who have decided on a lifestyle change but buyers generally are across the board and from a number of age brackets.
And some properties see a lot of interest from Aucklanders. One is a lifestyle property on the Otira Highway where three separate clients from Auckland were flying in to have a look.
Advertised as inquiry over $629,000, the 1.76 hectare, four bedroom homestead is set among mountains and has majestic views.
O’Donnell says you can still buy homes for between $220,000 and $260,000 in towns like Blaketown or Cobden, though they would likely require a bit of work.
A renovated home in Greymouth, on the other hand, could fetch anywhere between $500,000 and $700,000 dollars, says O’Donnell.
The record sale he had just made in Greymouth was “bristling with technology with security gates and all that sort of thing and it's gone for considerably higher than that.”
