Sweet home Ōtorohanga, where the house values increase 33.6 per cent

Sunday, 10 November 2019

Ōtorohanga's housing market reaches new heights with a 33.6 per cent increase in value in the past year.

The kiwiana capital has taken the country's real estate housing crown too with the highest percentage value increase in the past year.

Ōtorohanga's property values increased 33.6 per cent according to figures from Quotable Value.

Across Waikato the mean average increase was 9.36 per cent - 6.94 per cent if you argue Ōtorohanga is an outlier.

In October, a typical home in the district set buyers back $363,973, about $90,000 more than the previous year's $272,359 average.

Min Sanson brought her house in the new Sargent Place subdivision for more than $100,000 less than average prices in Te Awamutu.

* Questions are being raised about how big our housing shortage really is following the Census 2018 release

* Bars, rebar and builders - Inside Waikeria prison's $750m build**

The average value nationally increased 2.8 per cent year-on-year to $697,204. That's up from 2.4 per cent last month and 2.3 per cent the month before.

While prices have increased, Mayor Max Baxter said, homes in his district are still significantly cheaper than his neighbours to the the north.

Ōtorohanga mayor Max Baxter says people are flocking to the town because they've finally heard what a great place it is.

'We saw house prices grow [in Auckland] exponentially over the last few years, then that shifted down to Hamilton and the follow on effect was onto Waipā … eventually that was going to have a direct flow on effect to Ōtorohanga.

'It's been a long time coming and it's reflective of what's been happening across the whole country - we've just been slowly following along and our time has come.'

Te Awamutu has seen spikes in their housing market over the last few years so it was natural for people to shop around for the best deal, Harcourts sales consultant Kerry Harty said.

'The provincial towns are just doing a little bit of a catch up as people try to get away from the heat of the inner city markets.

'There's certainly a difference between Te Awamutu and Hamilton prices, same with Ōtorohanga versus Te Awamutu prices.

'For the sake of a 15-minute drive and $100,000 less than what they'd be paying in Te Awamutu, it's worth the drive.'

Min Sanson can attest to that. She moved to the town's new subdivision, Sargent Place, after finding homes further north a bit pricey.

Sales consultant at Harcourts Ōtorohanga Kerry Harty says houses have multiple above asking price offers on houses days after they go on the market.

'It's about $100,000, $200,000 cheaper, easy.

'It's dearer to rent in Te Awamutu, and rent has gong up so much you might as well pay a mortgage.'

With multiple buyers competing for limited stock offers above asking price isn't common, Harty said.

'It's just been a ripple effect and it's just pushed those values up up up and up … it's like the perfect storm.

'We've never really had a large number of stock on hand at any one time so we've had a large number of buyers once to the market and certainly supply and demand have kicked in which has driven those prices up.'

It's the new job opportunities coming to the district with dairy processing and prison builds that has people snapping up houses before the hordes descend, Baxter said.

'Young people are looking at opportunities to buy their first home, investors are looking at opportunities outside of the main centres and then once something starts - it's like a dung beatle rolling a ball, it gains momentum.

'Those that are obviously going to be working on and in the dairy factory during its build and its operation, those staff at Waikeria will look at and see Ōtorohanga as being a worthwhile investment.'

But Ōtorohanga won't see the full effects of the housing boom until upgrades to Waikeria Prison are finished, Harty said.

'I'm not a crystal ball gazer and we haven't even seen the concrete being laid on the ground at Happy Valley so what will it be when we've got these people coming here to work?

'Markets go up and down, but buyers can see opportunities are coming to the town … we haven't got to that yet so it's possibly only going to get busier.'