House prices soaring
The August 2018 figures from Quotable Values show that homes in Taupo¯ are nudging half a million dollars, with the average current value sitting at $478,529.
In September a three-bedroom Taupo¯ home in Hinemoa Ave sold for $432,500. The home has a current capital value of $334,000 and sold for $386,000 in 2016.
There are comparable house sales in Tu¯rangi, with a threebedroom home on Poiharaere St with a capital value of $181,000 selling for $228,000 in September.
At these prices, The Property Store general manager Jane Bennett says the buyers are owner-occupiers.
“What we are seeing at The Property Store is properties that have been in the rental pool for some time are changing to owneroccupied homes. This is reducing the rental pool which in turn is helping to drive up rental rates.”
Westerman Property Solutions Ltd director Ben Westerman says the Hinemoa Ave property represents a 12 per cent increase over a two-year period, in line with national trends.
“There has certainly been a lift in Auckland purchasers relocating to our region, but these Auckland buyers only make up approximately 25 per cent of buyers. Local buyers represent the majority of house sales in our region,” says Ben. He doesn’t believe the increase in house prices has changed the makeup of neighbourhoods, and the mix between renters and owneroccupiers is still the same, despite prices increasing.
“The region is still desperate for more investment properties, and it is really tough out there for tenants at the moment in terms of choice,” says Ben.
Landlords are all facing increasing costs, and this contributes to rising rents.
The TradeMe property rental market shows a similar story, with a three-bedroom house on Koha Rd, Taupo¯ fetching $440 weekly rent. Rent for a fourbedroom home in Tu¯rangi’s Te Rangitautahanga Rd is $360 per week. Jane says where properties have changed hands in the past year or so, the rent is barely enough to cover the mortgages.
“I would take a guess that rents have gone up in the same manner as house prices have gone up, and this is nothing new,” says Jane. “If you’re paying $450 a week in rent then you can afford a $320,000 mortgage. However if you can afford $450 in rent then you may not want to buy a house that is worth $320,000 — hopefully you’ve saved a good deposit,” says Jane.
The Property Store does not have any properties shared by two or more families, however Jane says this doesn’t mean it’s a scenario that a landlord would automatically disallow.
“Two families sharing a house, would really be a case-by-case situation.”
Ben says that Westerman Property Solutions hasn’t seen any real evidence of family sharing in rental properties, however it is reasonably common for two to three couples to share the rent burden.
People wanting to build smaller homes in response to increasing building costs can come up against rules that require new homes to be a minimum size. However Ben points to townhouse developments in Williams St and Motutaiko St that cater to the smaller home, lowmaintenance market. He also says there is a market for retirees looking for smaller dwellings.
“You just need to look at the Huka Heights area as an example of smaller sites allowing for smaller dwellings.”
He says the current stock simply isn’t meeting demand, but with plenty of development underway in the Wharewaka area there are signs that supply will increase in the short-medium term, which will ease pressure on both house and rental prices.
Taupo¯ District Council, which owns a 180ha block of land between the East Taupo Arterial highway and the Waipahihi and Richmond Heights area intended for housing, has said it has a master plan for the land which would encourage mixed use and allow some affordable housing to be built.
The average current value of Taupo¯ homes is creeping towards the $500,000 mark.
Ben Westerman of Westerman Property Solutions Ltd says the Taupo¯ region is still desperate for more investment properties for rental homes.