Tasman property values hit record high fueled by out-of-town buyers

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Out-of-town buyers and high value properties are clashing with low stock to help push up property prices at the top of the South Island.

New figures released by The Real Estate Institute of New Zealand (REINZ) on Tuesday show that median property prices in the Tasman region hit $850,000 in May – up almost $150,000 on the same month last year.

The growth was one of the five biggest in the country, which saw the national median jump 32.3 per cent, from $620,000 last year to $820,000.

Nelson was up to $700,750 from $580,000 a year ago, and Marlborough was sitting at $650,000 up from $490,000.

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Demand for houses is outstripping supply, real estate agents say. (File photo)

Martin De Ruyter/Stuff

Demand for houses is outstripping supply, real estate agents say. (File photo)

Local agents say the increases in the top of the south are being driven by the same lack of stock other regions are seeing, but the area is also facing strong interest from out-of-town buyers.

Data from CoreLogic shows that in the first quarter of 2020 about 75 per cent of relocating owner-occupiers sales in Nelson were to locals, but in the last quarter that had dropped to 56 percent, while the number of moving buyers from outside the region had jumped.

In the regional summary released on Tuesday, REINZ chief executive Wendy Alexander​ wrote that while open home attendance had eased, “interest from out-of-town prospective purchasers has remained strong”.

Summit Real Estate’s Richmond branch manager Gordon Webb​ said Nelson had always been an attractive place for people to move to, but there had been a noticeable increase.

“The trend had definitely lifted, there’s no doubt about that, and I guess you can see why people want to come here – it is the sunshine region.”

Houses in Richmond – the Tasman region reached a record median house price of $850,000 in May. (File photo)

MARTIN DE RUYTER/Stuff

Houses in Richmond – the Tasman region reached a record median house price of $850,000 in May. (File photo)

Purchasers from outside the region often had different expectations around price, which could help drive the figures up, he said.

“There’s more competition in the market and, depending on where they’ve come from … that brings a different value to the market.”

The number of houses sold in May was 66, more than double the 31 sold in May 2020.

The 2020 figure was likely affected by the Covid-19 lockdown, Webb said.

In the Tasman region the number of properties selling in higher price brackets was also pushing the median up, he said.

The REINZ figures show that the number of properties that sold for more than $1 million went from 5.3 per cent of the market in May 2020 to 17.6 per cent of the market in May 2021.

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The other main factor was low stock, with houses being sold very quickly, he said.

“The stock levels are low, but the stock doesn’t hang around.”

People who wanted to buy needed to be flexible with settlement dates, do their due diligence and put in a competitive price, he said.

“Do you want it, or do you really, really want it? That does make a difference.”

Pressure from out-of-town buyers is helping push up high prices in the region. (File photo)

Virginia Woolf/Nelson Mail

Pressure from out-of-town buyers is helping push up high prices in the region. (File photo)

REINZ Nelson/Marlborough spokesman Darryl Marshall​ said the pressure of low supply was a theme across the country where “demand is simply outstripping supply”.

”As quickly as they’re coming on [the market] there are interested parties.”

It meant that the market was going steadily up, rather than seeing traditional quiet times.

“The market just seems to continue each month whether it’s summer or winter.”

The area had always been a popular destination for people to move to, and it was all creating a competitive environment.

And, as prices increased so too did the price houses would be marketed at, he said.

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