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Bayleys Research


TAUPO RESIDENTIAL REPORT 2008

APRIL 2008

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OVERVIEW

The abundance of natural attractions and the renowned ambience created by the stunning vistas and clean, green atmosphere in Taupo appeal to a variety of people looking to acquire property for the purpose of holiday homes, permanent residence or for investment.

The median sales price of properties in the Taupo District has increased substantially over the last five years, with the latest December 2007 quarter of $345,000 being a 79% increase from the December 2002 quarter of $193,250. While the median sales price has been trending upwards since the December 2002 quarter, fluctuations have occurred. The latest three quarters of median sales prices show a correction in the market and possibly an early insight into the 2008 market conditions with values flattening out and possibly dropping by a modest amount in some areas. The December 2007 quarter median sale price increased by only 3% compared to the same period last year and since the June 2007 quarter the median price has eased from $362,500 to $345,000.

 

 

There is an overall weakening of the New Zealand residential sales volume which is not surprising given the high interest rate environment. Whilst sales volumes for Taupo made a slight comeback from the historical low recorded in September 2007 of 131 transactions to sit at 179 transactions in the December 2007 quarter, it is still an 18% drop from the levels recorded a year earlier in the December 2006 quarter.

In tandem with the slow down in sales has been the extended time it now takes to sell a dwelling as purchasers take more time over their purchasing decisions. The average days on market figure was up to 73 days in the December 2007 quarter. This is well above the mid 40s recorded between 2003 and 2004.

 

 

As illustrated by the graph below showing the distribution of sales by $100,000 price brackets, residential property in the Taupo District has shifted upwards in price over the last seven years. Closer analysis reveals that in 2007, the majority of sales were sold between the $300,001 and $400,000 range compared to the $100,001 and $200,000 range.

 

 

At the top end of the market, in 2000 there were 19 sales concluded above half a million dollars, but in 2007 there were 141 sales, representing just under a fifth of the total sales for Taupo.

As a result of the popularity of residential property in the area, Taupo is also receiving development interest, providing a slight recovery in the oversupply of the residential section market of the Taupo District. There were 385 new dwelling units authorised for construction during the year end to September 2007 worth just under $97 million, according to Statistics New Zealand (StatsNZ). This is an increase of 44% in number and a rise of 43% in value from the corresponding period in 2006. Building consents for new dwellings were issued for a total floor area of 77,565m2 during the year end to September 2007, an increase of 28% or 17,107m2.

 

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