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Rural Insight: Rural towns get breath of life

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While high house prices have been blamed for pushing home ownership in New Zealand’s larger cities further away for many, they have also proven to have a silver lining for smaller towns.

A number of small towns in provincial New Zealand are starting to enjoy the upside of the spill-over from their more expensive big brother cities down the road.

Bayleys New Zealand country manager Simon Anderson said across the country agents were reporting strong demand for homes in and around many small regional towns.

“There has been a bit of a debate lately about the fate of small towns, with a report from the Maxim Institute highlighting a number of populations likely to slide over coming years.

“However we are finding there is a very positive outlook for a number of towns often from people outside the region wanting to move in and take advantage of cheaper properties,” he says. A survey done by Auckland University and the Motu institute has found four key factors can impact upon a town’s ability to grow.

This included land use capability, human capital, sunshine hours and proximity to Auckland.

There are a number of key factors impacting a towns ability to grow, including land use capability, human capital and sunshine hours.

The “Auckland” definition extended out as far as 300km from the city.

The Waikato region falls well within that influence and is experiencing brisk demand for houses in towns like Huntly and Te Kauwhata, where several subdivisions are underway.

Population growth is being driven by buyers looking south of Auckland for cheaper homes, and within commuting distance of either Auckland or Hamilton.

Huntly in north Waikato has long struggled to retain population since coal mines have shut, but Waikato mayor Allan Sanson recently noted the town’s lack of space for more housing has prompted the council to earmark land on its boundary for further expansion.

Bayleys Te Awamutu sales consultant Stuart Gudsell said he continues to receive strong enquiry from buyers seeking more affordable housing than what they can get in Auckland.

There is strong enquiry from buyers seeking more affordable housing than what they can get in Auckland.

Buyers can obtain a sound family home for $350,000, a third of Auckland prices.

“On top of that the Waikato-Waipa region is experiencing strong growth, with good job opportunities that keep interest in towns like Te Awamutu solid. With projects like the Waikeria Prison expansion, we also expect to see continuing interest in properties in those smaller settlements like Kihikihi and Te Kaha.”

As a region Waikato is experiencing record population growth of 2.5% a year against the already high national rate of 1.9% a year.

South Island towns have not been immune from growth and the Motu report found Christchurch’s influence was also determined important, with its influence extending through much of the Canterbury region.

The initial boost to towns like Temuka, Oamaru and Methven provided by dairy conversions has been augmented by the surge in tourism experienced since then, helping cushion the effect of dairy’s tougher times recently.

Further south again, Bayleys Southland agent Hayden McCullum said prospects in Southland were bubbling over at present, with all the region’s towns and Invercargill city experiencing healthy housing demand.

“We are seeing seven major construction projects going ahead in Invercargill, and I know of builders in the region who are booked up for the next 18 months.”

Job opportunities were strong in Southland, with a new dairy factory in Gore likely to employ 60 staff when it commences processing later this year.

Fonterra and the Tiwai Point aluminium smelter continued to underpin processing jobs in the region.

“You can buy a comfortable three bedroom home in Gore for about $290,000, and that represents a lot more disposable income available to someone from the Auckland region, given total household incomes do not vary that much between the two places,” he says.

He said Te Anau was another town in the region showing very strong prospects, given its appealing lake front location, proximity to the rest of the region and strong tourism prospects.

Simon Anderson said the interest in provincial towns as options to the big cities was good news for both.

Interest in provincial towns as options to the big cities is good news for both – it takes some pressure off straining infrastructures and helps grow the population and development of smaller towns.

“It is taking some pressure off those cities that are facing ever growing demands on their infrastructure, while it is helping grow the populations of places that can cope with a few more people, and hopefully see a brighter future for them as a result.”

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