South LAND:
Where you can still chase the quarter-acre dream
If you build it, they will come, and so it appears to be true in Southland. Subdivisions are starting to gather momentum and while lifestyle properties at the top end of the market are not so hot to move, what is clear is people chasing the quarter-acre dream are feeling confident about Southland’s future.
Invercargill-based surveyor Don Moir, who has been a developer and consultant since the late 70s and has been involved in one of the major Te Anau subdivisions, Kepler Heights, said while we have seen growth spurts in the past, none have been as sustained or solidly founded as the current one in Fiordland.
Moir, who works for Ralph Moir and Associates, said: ‘‘I am a firm believer in the principle that if you build it they will come.’’
He is about to start an 18-lot subdivision on Dunns Rd, Otatara, which has previously been used for sheep grazing and hay production.
‘‘The property market has been a bit subdued in Invercargill in recent years, although there is still a steady demand for new residential allotments but perhaps not at the levels we experienced prior to the 2008 crash.
‘‘I think one reason for this is the lack of large greenfield residential subdivisions which are stifled because the [Invercargill] city council has not zoned any suitable undeveloped land.’’
Boyd Wilson, of Bonisch Consultants, agreed and said there was not enough appropriately zoned land for developments that could potentially happen in Invercargill in the next 10 years.
‘‘Invercargill has plenty of land and opportunity. It just needs a bit more thought by the council to come up with a new direction and strategy and make more land available.
‘‘We’re going through a ‘purple patch’ at the moment where things are definitely selling and the prices have gone up.’’
There were several new builds of infill housing in old neighbourhoods such as the Windsor and Rosedale areas, and this was due to rising house prices and availability elsewhere. However, while Invercargill was attracting some outside investment, it would never be an Auckland, but he said a ‘‘mini-Auckland’’ scenario should be avoided where land prices got out of hand because of lack of supply, making them unaffordable.
Invercargill mayor Tim Shadbolt said he did not rule out Southland being ripe for a land grab as the pressure came on with the rest of the country running out of available space.
But he could not see the region changing much even with development, and that lifestyle blocks would remain popular.
‘‘A lot of people are anti-lifestyle blocks because they use farmland but people also make use of those 10-acre blocks.’’
Invercargill had ample land, and Southland in general was a ‘‘scenic wonderland that’s underdeveloped’’.
It was getting an increasing number of tour diversions from Queenstown and there was much more connectivity going with Invercargill and Southland.
‘‘We’re getting lots more of tourists. I heard Gore referred to as a suburb of Queenstown the other day. That’s stretching it a bit, but people don’t seem to
‘‘Invercargill has plenty of land and opportunity. It just needs a bit more thought by the council to come up with a new direction and strategy and make more land available.’’ Boyd Wilson, of Bonisch Consultants
mind the long drive.’’
However, he disagreed the council had not been proactive in making sure there was available land for development, citing the area opposite the Ascot Heights subdivision to the city’s east, and the former cycling track the Kew Bowl as examples of council-endorsed developments.
Council senior policy planner Liz Devery said in a statement the council’s approach to zoning in the District Plan was the same as the Environment Southland’s Southland Regional Policy Statement; it addresses land use issues, while promoting growth and development within areas
with existing infrastructure capacity ahead of greenfield development.
‘‘If a developer has a proposal that does not meet the provisions of the District Plan, a resource consent would be required, or they could apply for a change to the District Plan.’’
Moir and Wilson are not the only developers reaping the benefits.
Since it began in 2005, Ascot Heights developer Murray Halstead has been playing the long game on his 170-acre subdivision, and a 13-year wait is being rewarded with sales beginning to pick up.
‘‘The housing shortage is pushing
people out of town to build on sections.
‘‘In the past four to five months we’ve had more people sign up than any period during the last 10-13 years.’’
More than half of the 135 sections in the subdivision have now sold.
Ascot Heights started out as 5-acre (2.2 hectare) blocks catering to the cashed-up retired farmers and people wanting a lifestyle, but it evolved because of demand for smaller sections made possible because of the council zone change.
‘‘I would like it to have been sold in five years, I expected it to be done in 10, but it is going to take 15.’’
The 2008 financial crisis was a factor, but once the housing shortage hit, it has slowly picked up, then accelerated this year. He predicted that a land grab would not happen.
‘‘It’s not going to because there’s plenty of available land.’’
He would not speculate on where the next big greenfield subdivision would be, but said it would not be him as the developer.
‘‘I would not do another one. You wouldn’t be able to it now. It would cost too much, and there wouldn’t be a profit in it.’’
The banks were much more riskadverse than they were 15 years ago, and simply would not lend the sort of money involved, he said.
One thing real estate agents appear to be saying in general is that there is not enough housing stock in Invercargill at present.
Todd Real Estate agent Carl Payne said listings were definitely tight for him.
‘‘The whole town is selling, listing one day and selling the next . . . I’d be out selling if I had anything to sell.’’
Payne said it was staggering that the average house price at Bluff was now $180,000.
It came back to the housing shortage, he said.
The same ‘‘crazy stuff’’ was happening elsewhere, with sections selling for between $15,000 and $19,000 at Ohai and $35,000 at Wyndham ‘‘that you couldn’t have given away a few years ago’’.
He noted that people were buying up ‘‘just because they would like some land’’, as the Queenstown Lakes prices drove them out.
Bluff Community Board chairman Raymond Fife was chuffed with the flow on effects for his community, where the average house price had crept up to about $180,000.
‘‘Houses that are on the market are going quite quickly, and that wouldn’t have happened 10 years ago.
‘‘Also, it’s not a bad place to live and people have come to realise that.’’
He said it could only mean positive things for his community, with business confidence clearly high at the moment, and the fourth potline at the Tiwai smelter reopening an example.
‘‘I don’t think you can say its one straight out fact [that has led to the situation] but lots of factors combined.’’
Southland mayor Gary Tong believed there would be more subdivisions and that it was entirely possible that the space between Winton and Invercargill could fill up with houses.
‘‘Over the years pieces of land have been broken up into 50, 20, 10 and 5 acre blocks just on the outskirts of our built up areas. I know some of the larger farmlets have been on sold as subdivisions.’’
Southland district lifestyle property sale prices have increased by about 30 per cent in the last five years, according to Homes.co.nz data, which excludes Invercargill and Gore.
‘‘Lifestyle properties in Southland have seen strong growth during the last couple of years with prices increasing by almost 20 per cent from 2016 to 2017, and more modest growth since,’’ chief data scientist Tom Lintern said.
Last year, the average price to buy a lifestyle property was $488,386 and this year $511,163, just below the $525,000 national median price of three years ago, according to the Real Estate Institute of New Zealand (REINZ).
REINZ data shows that nationally 7251 lifestyle properties were sold in the year ending in July, 12 per cent fewer than the previous year, and that the median price rose to $660,000; $80,000 higher compared to the three months ended July 2017.
REINZ rural spokesman Brian Peacocke said the figures reflected ‘‘a sector experiencing good health, but also a shortage of stock’’.
Lintern said in general terms, Southland had seen a 9.46 per cent growth in property sales in the last 12 months, compared with Auckland Central – 1.3 per cent decrease, Wellington City – 6.2 per cent growth, Queenstown Lakes District – 7.6 per cent growth and Dunedin City – 8.3 per cent growth.
‘‘Lifestyle properties are increasingly popular as they often offer urban amenities in a semi-rural environment. Areas such as Te Anau are being seen as an alternative to the more expensive Queenstown market.’’
For sections in the Southland District, Homes.co.nz data shows that prices had jumped by about 68 per cent from 2013, when the average price for a section was $95,444.
Last year a section could be purchased for an average price of $115,416 and this year about $160,572.