The figures that show you should have bought in a holiday spot

How has the housing market in New Zealand’s most popular holiday locations fared in 2018? We analysed 10 locations and found four stand-out facts.

First, and this may surprise you, but property in New Zealand’s popular holiday locations doesn’t necessarily come with a hefty price tag. As the first chart shows, many such locations have property values below the national average, with Whitianga sitting bang on the average.

Of course, even if they are starting at “affordable” levels, many of these locations have also become a bit more expensive this year, with only Waiheke Island and Paihia recording flat values in 2018. Coromandel, by contrast, has seen median property values rise by almost 11 percent (equivalent to a rise of about $46,000).

Secondly, as the second chart shows, there’s no out of season lull really: these locations have generally had active property markets throughout 2018, with only Waiheke Island and Wanaka having had a turnover rate (sales as percentage of dwelling stock) noticeably below the national average. Coromandel again stands out, with a turnover rate of almost 8% in the past 12 months.

Third, when a property has come onto the market in these areas over the past year, it has tended to sell pretty quickly. Properties in Tahunanui, for example, have only taken a median of 16 days to sell (see the third chart). Of course, some areas have taken longer: notably Coromandel, Paihia, and Whitianga.

Fourth, gross rental yields tend to be lower in most of these areas, with only Paihia, Tahunanui, and Coromandel notably above the national figure (see the fourth chart). Low gross yields from putting a property into the traditional rental market in Queenstown, for example, make it easy to see why Airbnb (which tends to have higher returns) is having a pretty big impact there.

Clearly, the areas we’ve covered here are also residential locations and aren’t just for holidays, with property values and market performance determined by all of the usual year-round supply and demand factors.

However, any holiday-makers who were tempted into a property purchase in an area like Tahunanui 12 months ago will have even more reason to enjoy their break a year on.

Kelvin Davidson is senior research analyst at CoreLogic NZ.