Price surge in ‘af­ford­able’ sub­urbs

Nelson Mail - - FRONT PAGE - JONATHAN CARSON

House val­ues in Nel­son’s most ‘‘af­ford­able’’ sub­urbs are in­creas­ing faster than any­where else in the re­gion, new fig­ures show.

The cen­tral Nel­son sub­urb of Toi Toi has seen the great­est rise in house val­ues over the past year, fol­lowed by Tahu­nanui and Nel­son South.

The rise of Nel­son’s most af­ford­able sub­urbs has oc­curred dur­ing a ‘‘per­fect storm’’ of strong com­pe­ti­tion for en­try-level houses and low num­bers of list­ings, driv­ing up prices to record highs.

But com­mu­nity or­gan­i­sa­tion, Voice Nel­son, says the re­gion’s prop­erty mar­ket is im­pact­ing on rents and driv­ing more peo­ple to home­less­ness.

In the year to Jan­uary, prop­erty val­ues in­creased by 20 per cent in Toi Toi, 17.9 per cent in Tahu­nanui, 17.6 per cent in Nel­son South, and 17 per cent in Wash­ing­ton Val­ley, ac­cord­ing to data from QV. De­spite the sig­nif­i­cant in­creases, the sub­urbs re­main the re­gion’s most af­ford­able.

In Jan­uary, the me­dian prop­erty value was $347,900 in Toi Toi, $388,500 in Wash­ing­ton Val­ley, $431,200 in Tahu­nanui, and $466,950 in Nel­son South.

In com­par­i­son, the me­dian prop­erty value in cen­tral Nel­son was $664,500 (up 15.7 per cent), $588,900 in Atawhai (up 13.7 per cent), and $501,500 in The Wood (up 16.3 per cent). The lat­est av­er­age prop­erty value in Nel­son was $513,933, ac­cord­ing to QV.

QV Nel­son reg­is­tered val­uer Craig Rus­sell said Toi Toi, Tahu­nanui, Nel­son South and Wash­ing­ton Val­ley had a high num­ber of prop­er­ties in the $300,000-$450,000 price bracket, which had been ‘‘the most com­pet­i­tive’’ area of the mar­ket over the past 12-18 months.

As first-home buy­ers, owne­roc­cu­piers and in­vestors com­peted for these prop­er­ties at the ‘‘af­ford­able’’ end of the mar­ket, they were push­ing prices up, he said. ‘‘Me­dian val­ues in these lo­ca­tions have shown the great­est per­cent­age in­creases given they are con­sid­ered more af­ford­able.’’

How­ever, an av­er­age house in Nel­son’s most af­ford­able sub­urbs cost more than four times the me­dian house­hold in­come – far from af­ford­able ac­cord­ing to in­ter­na­tional stan­dards.

‘Per­cep­tions have changed’

Ray White sales­per­son Alex Ger­aghty said when he moved from Auck­land to Nel­son two years ago, he saw Toi Toi and Nel­son South ‘‘for what it is and what it will be’’.

He said it had sim­i­lar­i­ties to Pon­sonby in Auck­land.

It was close to town, schools, kinder­gartens, the hos­pi­tal and home to a vi­brant com­mu­nity.

‘‘I was say­ing it’s such an un­tapped area and I saw great growth there, and that’s been backed up with the fig­ures.’’

He said the sub­urbs where prop­erty prices have in­creased fastest have his­tor­i­cally suf­fered from pub­lic mis­con­cep­tions.

‘‘Toi Toi was an area that peo­ple didn’t want to move to.

‘‘I think that per­cep­tion of the area has com­pletely changed,’’ he said.

‘‘It’s more at­tain­able than other ar­eas. I think there’s been such a tran­si­tion in Nel­son South. It’s not for peo­ple think­ing that’s all I can af­ford, but ac­tu­ally what I get in terms value is a lot more than in other places.’’

For first-home buy­ers, who fol­lowed the rule of ‘‘buy where you can’’, af­ford­able sub­urbs were a log­i­cal choice, he said.

‘‘It takes one or two buy­ers to come in and start spruc­ing up and do­ing that kerb ap­peal and it does change the street.’’

The new ‘af­ford­able’

Voice Nel­son hous­ing spokes­woman Mary Ellen O’Con­nor said the gen­tri­fi­ca­tion of the city’s most af­ford­able ar­eas has put pres­sure on renters.

‘‘It’s aw­ful when the af­ford­able sub­urbs start to move up in price,’’ she said.

‘‘By the time what was af­ford­able be­comes un­af­ford­able, that’s when you’re look­ing at real home­less­ness.’’

O’Con­nor said more Nel­son peo­ple were liv­ing in camp­grounds, garages and shar­ing houses with other fam­i­lies as a re­sult of ris­ing prop­erty val­ues.

As val­ues went up, land­lords and prop­erty man­agers were in­clined to in­crease rent.

O’Con­nor said more peo­ple were reach­ing the end of ten­ancy agree­ments and find­ing that they couldn’t af­ford the higher rates.

‘‘I guess it’s just re­flect­ing the na­tional pic­ture. You’re get­ting ex­tra­or­di­nary di­vide.’’

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