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24-12-2007

Can't afford to buy in Ak? Look south

NZ Herald

One of New Zealand's property hot spots is one of its coldest, with one expert predicting big things for Invercargill next year.

The deep south centre is expected to take off in value and popularity next year, regardless of the funding problems plaguing one of its major drawcards, the Southern Institute of Technology.

"It's a fantastic area," enthused Kieran Trass, who runs the suburbwatch.co.nz site.

"Who's buying there? First-home buyers and property investors - because you can buy some of the cheapest three-bedroom houses in the country there. I think the momentum is there to carry it on throughout next year."

The median price of presentable, affordable homes ranges from $250,000 to $270,000 in the area.

Positive returns from dairy farming and oil exploration in the area is also expected to have a positive effect on Invercargill's real estate market.

The expected influx of newcomers has led to a "building boom", according to one local agent, with a 600-house estate planned for the appropriately named suburb of Newfield.

The booming dairy industry is also expected to have a spin-off for North Island seaside towns.

Real Estate Institute of New Zealand president Murray Cleland is predicting growth in towns such as Mt Maunganui and Whangamata as dairy farmers use Fonterra payouts to buy baches or holiday homes.

Inland, Cleland noted, small Waikato towns had been growing, particularly Te Aroha.

That's a view backed by a Bayleys spokesman, who included Matamata and Morrinsville as areas booming due to an easy Hamilton commute.

South of Waikato, sales and value have increased in Rotorua this year, and are likely to continue to do so.

The west coast of the North Island was also pinpointed as a popular place by Bayleys, with Raglan and the Kaipara Harbour continuing to gain in value.

In the north, subdivisions at Mangawhai would draw more people to the seaside area.

West could be best in the South Island too.

Cleland said some areas have been "slightly under-valued", in particular coastal towns such as Greymouth and Hokitika where "people have woken up to their value".

Some experts were unsure how their tips would translate to sales.

Harcourts chief executive Bryan Thomson said people continued to buy in areas that suited their lifestyle, rather than because of forecast value increases.

"I don't meet many people who would shift to a totally different location simply because they had been told they would make money on the property there," Thomson said.

"People buy houses where they want to be, based on schools, transport and work."

Long-time investor and director of The Traders investment advice group, John May, didn't believe there were any particular hot spots.

But he did expect the slump to present a good opportunity for first-time buyers to get into the market.

"What generally happens in New Zealand is that property owners simply withdraw their houses from the market, and that has a tendency to stabilise everything.

"But in among it, there are still going to be a few people who are going to have to clean up their portfolios and personal finances, and sell their properties."

May said buyers had an opportunity to get some good deals from builders and investors until the general election when high interest rates might be reassessed by the next government.

Hot spots

  • Mangawhai
  • Waikato - Te Aroha, Matamata
  • Whangamata/Mount Maunganui
  • Rotorua
  • West Coast, North Island - Raglan, Kaipara Harbour
  • West Coast, South Island - Greymouth, Hokitika
  • Invercargill

Tags: invercargill - kieran trass - murray cleland - reinz

Source: NZ Herald

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