Strong growth, but sales plummet
Strong economic growth continues on the Coromandel — exceeding the Waikato and national growth rates — although property sales have plummeted by almost a quarter in the year to June.
The latest quarterly economic data release from Infometrics reveals GDP in Thamescoromandel was $1092 million in the year to June 2018, up 3.3 per cent. That’s well above the 2.6 per cent growth rate for the wider Waikato region, and 2.7 per cent nationally.
Tourism expenditure and guest nights are up 5 per cent and 3.4 per cent respectively. Traffic flows, another good indicator of economic activity, rose 5.7 per cent in the year to June.
Thames-coromandel mayor Sandra Goudie says it was good to see the low unemployment rate recorded in the recent data, at 2.8 per cent.
House sales are down 23 per cent — the only negative in the overall picture since property values remain buoyant.
However, local real estate agents say a lack of listings accounts for the lack of sales. “If you’re thinking of selling, the values are still there and there’s still demand for people wanting to be on the Coromandel,” says Whangamata Real Estate principal Murray Cleland.
“Our latest sale was beachfront at $2.5 million. And at the bottom end a $500,000 house still has buyers when these listings come into the market.
“When the sun comes out, the buyers come out.”
In Tairua, similarly there is a lack of supply. Harcourts Tairua owner Tony White says it’s a good time to list. “I just sold a house that had been on the market for a long, long time. We put it back on the market and it sold for asking price. We do have a shortage of houses to sell.”
The Infometrics report points to the drop in house sales as a much stronger fall than the nation-wide trend where sales fell by 7.0 per cent. “Looking forwards, non-residential consents fell again by 22 per cent in the June 2018 year, which is a concern for the construction sector, but this will be tempered by a 6.6 per cent rise in residential consents.”
The council campaigned in recent years to lure city dwellers seeking a sea change, or persuade bach owners to work and enjoy their holiday homes for more days of the year. It may well be working. Traffic flows, a good indicator of economic activity, rose 5.7 per cent to June.
“It’s entrepreneurs and business people that create jobs by establishing and investing in businesses on the Coromandel,” Mayor Goudie says.
“Our mission is to create an environment for the private sector to invest in our district.”
With baches reaching the values that they now have, it’s little wonder the owners are choosing to maximise their investment with more time at the beach, says Bunnings Whangamata manager Ted Littlejohn.
He’s noticed spending habits have changed in the retail side of the business and as a wholesaler to local building crews, growth was significant.
“Last year most definitely we saw a big rise in building supplies. In retail, people are staying in town a bit longer and taking Monday and Friday off. With all the houses that got sold over the last few years, the values have got so high you are almost forced to make use of them. You really want bang for your buck.
“From our point of view, that’s fantastic.”
Mr Cleland echoes this sentiment: “A number of people are working here three to four days per week and going back into the city. With technology it’s absolutely possible to work here.”
According to QV, the median house price in Whangamata is just shy of $800,000. There was a total of 50 property sales in the last three months.
The Coromandel’s unemployment rate remains very low at 2.8 per cent and that’s particularly impressive since migration (an annual gain of 171 people) has boosted our district’s labour supply. Thamescoromandel’s unemployment rate also compares favourably to the national average of 4.5 per cent.
Growth is on the rise across parts of the Coromandel and Whangamata.