House values in a large rural town in the South Island are still on the rise as out-of-towners are being lured in by its cheaper property prices and central location.
Ashburton’s median sales price rose more than any other Canterbury district in May, up $518,000 from $445,000 the previous month, according to the latest REINZ figures.
The number of properties selling in the town has also remained relatively steady with 51 sold in May, compared with 54 in April and 67 in May 2021.
The OneRoof-Valocity House Value Index highlights the same growth story, with Ashburton's average property value up 18.6% year on year, and 2% over the quarter, to $607,000.
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Harcourts Ashburton owner Tammy McDougall said people from all over the country including Marlborough, Cromwell, Queenstown, Taupo and Auckland are moving to Ashburton, but there are not a lot of houses on the market to choose from.
She said people moving from some of the more expensive areas like Queenstown or Cromwell can sell their house for $1.8 million and buy the same thing in Ashburton for half the price.
“We are the middle of the South Island so a lot of the people who came here are retirees. Retirees love it because they are in the middle of the South Island so they can go caravanning and campervanning and they can turn left or right and go north or south in the South Island.”
2 Goldrich Grove, in Netherby, Ashburton, is seeking offers over $715,000. Photo / Supplied
Christchurch International Airport is only an hour away so people can be on a plane in an hour and fly anywhere in the world. Timaru is also nearby.
An entry-level home in Ashburton can be snapped up for about $400,000, while a modern four-bedroom family home is between $700,000 and $800,000.
McDougall, who is currently marketing an entry-level three-bedroom, one-bathroom home on McMurdo Street, in Tinwald, and a four-bedroom, two-bathroom family home on Goldrich Grove, said Ashburton was an affordable, nice and friendly place to live.
“We are rural-backed, we’ve got good industry here, there’s always jobs. We don’t tend to have any trouble.”
While demand for houses remains strong, McDougall has noticed that buyers in the lower-end of the market are taking a bit longer to make a decision partly due to delays in getting finance.
Property Brokers Ashburton real estate agent Hamish Niles said both houses as well as sections in the new residential subdivisions have been selling well and the area still offers good value for money.
People from around the country have been interested in sections at Strowan Fields because they are well priced compared to other parts of the country, while Lake Hood is also popular with people wanting to build holiday homes there, he said.
Sections are for sale at Stage 14 Lake Hood Drive, in Ashburton. Photo / Supplied
Sections range between $200,000 and $500,000 and Niles is currently selling a 953sqm section with canal views in Lake Hood for $379,000-plus.
In the past 10 years new subdivisions have popped up all around the town so there is good housing in all of the suburbs and all of the schools were “pretty good right across the board”, Niles said.
“Our prices compared to a lot of other regions in the country – you get a lot more value for money here and we are obviously seeing people come here because of that.”
Niles said there appeared to be fewer first-home buyers in the market due to the tougher lending rules, but agreed with McDougall that there are not many houses on the market for people to choose from.
“Things have still been selling well and there’s not as much stock on the market, which is quite normal for this time of the year generally.”
CoreLogic chief economist Kelvin Davidson said Ashburton is definitely more affordable than a lot of other areas and also offers higher yields for investors.
Only 32% of a household’s income was needed to pay a mortgage in Ashburton, compared to 50% nationally, CoreLogic data showed.
CoreLogic chief economist Kelvin Davidson says Ashburton is proving attractive to investors. Photo / Peter Meecham
It also offered higher yields of 3.9% compared to the national average of 2.6%, which Davidson said may be why there has been an increase in the number of investors in the town from 26% to 31% in the last year.
CoreLogic’s own house value index also shows Ashburton is doing “OK” with average values across all property rising 2% in May, despite the national average value dropping -0.9%.
“Being a farming economy, that will be supporting sentiment and economic confidence too. On the whole, it’s probably not too surprising that Ashburton is holding up – and it’s fair to suggest that it might continue to do so - even if that only takes the form of smaller price falls than elsewhere.”
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