Here’s where the biggest capital gains have been this decade


If you were looking for capital gains in the real estate market over the past ten years, your best bet might have been Kawerau.

Realestate.co.nz has released new data showing the evolution of asking prices for regions around New Zealand since 2012.

It showed that the biggest capital gains of the decade were in smaller centers across the country.

Kawerau led the table, up 282.1%, to an average asking price of $361,441.

But prices also more than doubled in 34 other regions, with the biggest increases in South Wairarapa (up 155.5%), Carterton (up 148.3%), Tararua (144.9%) and Central Hawkes Bay (143.5%).

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Central Otago and Dunedin were the only centers in the South Island whose prices had doubled.

Spokeswoman Vanessa Williams said it was likely due to the population. Larger populations in the north meant there was more demand.

In Auckland, Waitakere, Waiheke and Papakura all saw their average asking price more than double over 10 years, up 125.5%, 123.6% and 117%, respectively.

Williams said a decade ago Waitakere and Papakura had average prices of $506,090 and $480,687 respectively, just over half of central Auckland’s $781,109.

But this accessibility had helped prices rise.

Average asking prices in these areas had risen faster than those in central Auckland over the decade, narrowing the price gap in these areas.

Waiheke Island has seen significant growth in property prices.

Provided

Waiheke Island has seen significant growth in property prices.

Williams said average asking prices in the central suburbs are now over $1.5 million.

“Although Waiheke offers favorable transport options, unlike Waitakere City and Papakura, where lower prices have been a factor, I suspect Waiheke’s popularity has been driven by those seeking a lifestyle change or can -even be a second home,” Williams said.

Prices also more than doubled in Tauranga, Rotorua and Whakatane.

“In Tauranga in particular property prices started to rise quite rapidly from around 2015 – this is also when we started to see the growing trend of Aucklanders moving into the beach town looking for affordable housing,” Williams said.

“The average annual asking price in Auckland City reached over $1 million for the first time in 2015, so it’s no wonder Aucklanders started looking to the regions around this time. “

South Waikato, Waikato, Hamilton and Matamata-Piako saw their prices increase by 127.5%, 122.5%, 119.4% and 118% respectively.

Williams said this was driven by the popularity of lifestyle properties there.

In Wellington, since 2012, average asking prices have increased by 136.7% in Kapiti Coast, 128.3% in Upper Hutt City, 127.5% in Lower Hutt City and 108.2% in Porirua.

But the average asking price in central Wellington has increased by 85.3% in the ten years to 2021.

“What we’ve seen in the Wellington area is that many outlying areas are ‘catching up’ to central city prices that are generally above those seen in outlying areas,” Williams said.

“Yet the average asking price in Wellington City in 2021 was $1,023,166 – up $471,069 from 2012.”

Canterbury’s price growth has been slower over the past ten years compared to other regions.

None of Canterbury’s neighborhoods have seen prices double in the past decade.

“As part of the rebuilding efforts, we’ve seen an oversupply of homes in Canterbury, and that’s likely had an impact on the average rate of asking price growth in the area,” Williams said.

“The real estate market tends to operate on supply and demand. When supply is low, demand and prices generally increase. But when buyers have plenty of choice, as there is when there is oversupply, prices tend to fall.

Infometrics chief forecaster Gareth Kiernan said a few factors could influence which areas seemed to perform best.

“First, the smaller nature of some of these markets means that there is likely to be more variability in their rates of price growth than in larger urban centers. For every Kawerau or South Wairarapa, there is a Buller or a Hurunui.

“One can obviously pick specific reasons why the bottom two might be down the list, but that’s the point. The small and highly concentrated nature of their economies means they can be vulnerable to changes in economic fundamentals. or buyer demand – whether good or bad.

He said there had also been a compression in rental yields in recent years – rental yields relative to the purchase price – which encouraged investors to look to cheaper areas.

“This trend has seen more and more investors looking at the relatively high yields in towns like Kawerau and being prepared to drive prices up because the yields look much more attractive than in larger urban centres. Of course, there is a risk with the smaller market that your property will be vacant longer between tenants, undermining the effects of better returns when the property is occupied. There is also the risk associated with real estate prices in a small town, that a major employer may close or that there may be a lack of buyers when you want to sell the house, limiting your ability to fully realize capital appreciation of the property you thought had occurred.

He said there might also be a timing issue.

In March 2012, Kawerau prices were still 7.6% below their March 2009 level, according to CoreLogic, but Auckland was 14% above.

“In other words, the acceleration in house prices in Auckland started before the rest of the country and, if the previous boom is any indication, Kawerau will be one of the last to slow down (but also the harder to fall). Of the top five areas mentioned by Realestate.co.nz, only Carterton’s result beats Auckland if we measure peak to peak.

“Measuring peak to peak (or trough to trough) is the fairest way to compare regions over time – otherwise you run the risk of only selecting part of the growth cycle and getting a skewed picture. “

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