Nelson Residential Property Market Update - September 2015

In this issue we visit the current topical issue of the housing market and provide our comments on metrics in the upper end residential market, first home buyer market and sections in the new build market.

Top end activity

Recent sales activity shows buoyancy at the top end of the market at present.  Premium home sales in Nelson have been quite subdued since 2008 but activity picked up slowly but surely since 2013.  2015 has seen 26 sales settle above $800,000 since January.  Overall the level of activity is what would be expected but the key difference is the lack of listings.  This does seem to be translating into upward pressure on prices.  A number of million dollar properties, which have sat on the market for up to a couple of years, have recently sold at strong price levels.

23 Brougham Street

56 Shelbourne Street

 BroughamSt23  shelbourneSt56

Sold 04/05/2015 for $1,310,000

Sold 21/01/2015 for $1,450,000

This five bedroom family home had been listed for sale at various times since 2012 and sold quickly when re-listed in April 2015.

This five bedroom family home previously sold in February 2014 for $1,240,000.  A 4.7% gain in less than twelve months with no alterations to the property. 

21 Avon Terrace

60 Cleveland Terrace

 AvonTc21  Cleveland60

Sold 31/07/2015 for $1,310,000

Sold 11/06/2015 for $1,675,000

This fully upgraded and immaculately presented character home sold within three weeks of being listed.

This large home set on a large inner city site had been on the market since 2012.

 

 Source RPNZ

First Home Buyer Market

A shortage of supply of houses for purchase is not something that is unique to Auckland.   The number of listings at the bottom end of the market is also thin in Nelson City.  Uncertainty in the economy in general may well be an explanation for homeowners deciding to sit on their hands, rather than move house unless it’s absolutely necessary.  Listings are now at low levels, however sales volumes are the highest they have been since 2012.  Agents report multiple offer situations becoming more commonplace, as first home buyers aim to get a step onto the property ladder at a time of historically low mortgage rates. 

1/54 Green Street, Tahunanui

11 Cherry Avenue, Enner Glynn

 GreenSt54  CherryAv11

Sold 28/04/2015 for $311,200

Sold 29/06/2015 for $330,000

This 1950’s two bedroom bungalow sold for $292,000 in May 2013.  The most recent sale shows a 6.6% increase in two years.

This 1950’s three bedroom house with detached garage last sold in June 2006 for $300,000.  Unaltered condition between sales.  10% increase since 2006.

72 Tipahi Street, Nelson South

5 Abraham Heights, Toi Toi

 TipahiSt72  AbrahamHts5

Sold 12/05/2015 for  $300,000

Sold 25/05/2015 for $245,000

This 1910’s three bedroom villa  on 679 m² last sold in September 2005 for $252,000. Upgrading since last sale included installation of average quailty modern kitchen, upgrading of logburner and basic redecoration.  19% increase since 2005. 

This 1980’s three bedroom home with off street parking only last sold in August 2006 for $216,000.  Since that time the bathroom has been modernised.  13% increase with minor work between sales.

 

Source RPNZ

New Build Market

There has been a steady supply of new houses being brought into the market, primarily in Richmond, but also in Marsden Valley.  Uptake of the Marsden Valley subdivisions in particular got off to a slow start a couple of years ago, but demand has firmed which has in turn seen section prices rebound and settle around the $225,000 mark.  These sites are still on average $10,000 to $20,000 cheaper than comparable sites in Richmond reflecting the relative proximity to amenities and schooling.  The Daelyn on Saxton and Concordia subdivisions in Richmond have been well received in the market.  Sections in those subdivisions have averaged $246,000 and $268,000 respectively.  Sections in the Trek Subdivision in south Richmond are also selling well at around $230,000.  Demand for new builds has spread further afield to Brightwater, where the average section price has crept up to $190,000 - $210,000.

Macroeconomic Drivers

In general terms, the market in Nelson was stagnant for a prolonged period from 2007 through to 2013, however things started picking up in Richmond a lot earlier.  The graph below reveals that on average, the median sale price in Richmond has grown 22% since 2008, whilst the median in Nelson is on average up 15% on 2008 levels.

market2008

Source REINZ

Nelson has always attracted, and will continue to attract out of town purchasers who look to move to the region as a lifestyle choice.   This is nothing new.  Despite murmurings in the media, there does not appear to be a flood of Auckland buyers in the market but agents have reported they are starting to turn up at open homes.  The reality is that the demand for housing is closely linked to the employment market, and those currently living in our largest city who may have historical ties to Nelson, or the South Island generally, are those most likely to wager a move.  The latest employment statistics show that while Auckland had the strongest regional employment growth in the country in the year to June 2015, with 29,600 new jobs, the Nelson/Marlborough/West Coast and Tasman regions combined lost 300 jobs.  The sticking point has always been the need to either have job portability or a job to come to in order to migrate south.  Portability will be enhanced with the new regional airline players now confirmed to service Nelson, raising the prospect of increased demand for our housing market.     

 


Location: Nelson | Posted 4 years ago