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NELSON AND MOTUEKA RESIDENTIAL REPORT 2008

The residential market in Nelson and Motueka has undergone a period of value growth over the last couple of years, along with most regions throughout the country, but economic events over the last nine months have resulted in prices levelling off. According to the Real Estate Institute of New Zealand (REINZ) statistics, from the December 2005 quarter until September 2007 median sale price for dwellings increased 20% from $283,500 to $340,000. In the December 2007 quarter, the median dropped slightly to $335,000.

 

 

The residential property market appeared to go through a lull in the middle of 2007 with just 431 and 443 transactions recorded for the June and September quarters, respectively. A resurgence in the number of sales occurred in the December 2007 quarter to 632. This is almost at the peak levels experienced at the end of 2002 and beginning of 2003.

Furthermore, the average number of days it took for a property to sell in Nelson and Motueka decreased in 2007 compared to the previous two years. In 2007 it took seven weeks on average for a residential property to sell, while during the previous two years it took an average of nine weeks.

Another measure of the long-term value growth in the residential market is to compare the proportion of sales falling within $100,000 price brackets in 2000 and 2007. In 2000, the majority of transactions completed in Nelson & Motueka were priced between $100,001 and $200,000 with a smaller number of sales falling between $200,001 and $300,000.

In 2007, the majority of sales fell within three separate price brackets, ranging in price from $200,001 and $500,000, with more transactions completed at the higher end of the spectrum.

 

 

At the top end of the market, in 2000 there was one sale completed between $700,001 and $800,000 and no sales recorded by REINZ above this. In 2007, however, there were 95 sales recorded over the $700,000 mark, 18 of which exceeded $1 million. This indicates the dramatic increase in values that have occurred in the area since the turn of the century, particularly at the top end of the market.

The residential market in Nelson and Motueka has proved to be somewhat resilient to economic events which have resulted in a national slowdown in activity in the property market. Sales volumes for the final 2007 quarter increased while most regions throughout the country experienced a decrease. Local market commentators believe this is due to the area being an export orientated region – one in ten residents of Nelson was born in the UK or Ireland and the Tasman district experienced a 35% increase in British migrants from 2001 to 2006. This trend has continued through to present.

 

 

However, in line with national trends, Bayleys Research believes transaction volumes will decline in 2008, as the combination of a strong New Zealand dollar and slowing migration impacts upon the local market. As a result we expect to see median sale prices continue to flatten out, or possibly drop by a modest amount in some areas.