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What’s attracting residents to our regions?

Tags: Auckland Hawkes Bay Northland Research Residential

June 2017 has emerged as another month reporting record migration levels to New Zealand, with approximately 43 percent of the 72,305 new arrivals bound for our largest city, Auckland.


But how long are they likely to stay put, asks Bayleys property reporter Katharina Charles.

Affordable property, the allure of wide-open spaces and smiling locals might be the carefully cultivated image of our regional centres, however these factors alone can’t account for the promising growth across areas like Northland, Hawke’s Bay and Gore which were once at risk with declining populations.

“The rapid rise of our national population is opening up a world of possibilities for regional towns,” says Bayleys Eastern Realty rural director Jacqui Taylor.

“There’s an increased demand for goods and services, greater need for housing and a larger supply of available workers ready to facilitate growth.

“The latest numbers from Statistics New Zealand show that the country is currently experiencing the fastest pace of population growth since the mid 1970’s – this has huge ramifications for local economies,” Ms Taylor adds.

Northland is one such beneficiary, with international migration rising by 62 percent in the year to June 2016 – the highest increase on record for the region.

Dubbed ‘the Auckland effect’, it would be a mistake to relegate Northland’s economic buoyancy as simply a halo of Auckland’s recent progress, where desperate Aucklander’s push the boundaries north in search of a home with proximity to the city.

“Northland’s prosperity is quite deliberate,” says Bayleys in the North general manager Tony Grindle.

“The local economy has grown by nearly 20 percent over the last five years, thanks to the strong performance of the agricultural, manufacturing, tourism and horticultural sectors.

“This has had a flow-on effect for property sales which have similarly increased by 20 percent over the last 12 months – 10.3 percent in the last three months alone,”

“We have certainly noticed more young families trading big city life for a small orchard in the North – and why wouldn’t you? The avocado industry alone has increased in value by 65 percent over three years with international demand proving to be very rewarding for farmers in the North,” Mr Grindle adds.

However horticulture isn’t limited to just Northland. About six hours south, on the east coast of the North Island, seasonal fruit pickers have been drawn to the sunny Hawke’s Bay for years, with more than ever before are staying on to call the region home.

In a 2015 estimate, Statistics New Zealand reported that the population of the Hawke’s Bay was expected to increase by 6,100 over the next three decades. However the bureau has since revised projections amidst record high levels of net migration, with the new estimate more than doubling the original figure at 12,800.

House prices are rising too – sales in the Hawke’s Bay have lifted 17 percent in the last 12 months according to statistics from the Real Estate Institute of New Zealand (REINZ).

“Despite consistent value increases for homes across the region, the median sale price in the Hawke’s Bay (presently $370,000) sits well below the national median at $529,000,” says Ms Taylor.

“While the region is behind in terms of median value, it’s good news for investors who are reporting rental yields of up to 12 percent in areas like Hastings. Compare this to the ceiling of six percent in Auckland (where yields most commonly sit around four percent), and it makes for a very attractive alternative.

“It’s a really interesting time, we estimate around 15 percent of home sales across the region are to buyers based out of the area, with about half this number selling to Auckland-based buyers.

“Young couples with vision are bringing their ideas to the region capitalising on the preferable climate and abundant viticulture, horticulture and forestry, meaning we’re enjoying a fresh wave of gastronomy, retail and service-based businesses, spurred on by low interest rates and a higher level of household spending.

“Schooling is a huge drawcard in the Hawke’s Bay, there are plenty of primary, intermediate and secondary schools, including a selection of private institutions to entice young families,” says Ms Taylor.

While the Hawke’s Bay rides the wave of increased interest, perhaps the best example of population growth and its effect on the local housing market can be observed in the Southland town of Gore.

Enduring a steady decline in population from 1996 right through to 2013, Statistics New Zealand reports that in the three short years to June 2016 Gore’s population has increased by 3.8 percent.

Known as the ‘country music capital’ of New Zealand with an abundance of trout fishing and an ageing population, Gore has become a home-buying destination of sorts with sale vales rising 65 percent in the year to June 2017, according to data from Statistics New Zealand.

“Investment in rural infrastructure such as the $200 million Mataura Valley milk factory south-west of Gore have had a huge ripple effect on the local property landscape,” says Julie Mitchell, a salesperson with Bayleys Gore.

“The development has already shown many benefits for the region including job opportunities and significant income to the local economy. These opportunities have attracted a lot of attention from those looking to move to or invest in Southland,” she says.

“We’re not quite at the stage of enticing hordes of young residents as the majority of incoming migration appears to be South Island, however Gore’s economic prospects are most positive then they have ever been and the area is becoming a more attractive option for investment,” she explains.

As immigration and it’s flow-on effects for the housing market shape up to be key election issues, it’s important that we consider the benefits of a growing population.

“New arrivals in the regions bring attractive skills to the economy, starting businesses and providing employment opportunities for other residents.

“With enterprise, infrastructure, housing affordability and education all attributes which continue to attract big city residents to the regions, there’s never been a time like the present to make a move and capitalise on the options a regional lifestyle offers,” Ms Taylor says.

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