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An economist expects a flood of cheap money to enter the housing markets of popular summer cities to further worsen affordability for locals.
Waihi Beach resident Ross Goudie (pictured) says that locals can no longer afford to live in the city.
Photo: Unsplash / Douglas Bagg
Data released today by the New Zealand Real Estate Institute (REINZ) shows that the median selling price of homes in many coastal cities is skyrocketing.
Year-on-year sales prices in Waihi Beach and Akaroa were up 50 percent, with others easily exceeding 20 percent, including Mangawhai Heads, Omaha, Mount Maunganui, Whangamatā, Taupō and Arrowtown.
In the three months through November, the median sales price in the Bay of Plenty town of Waihi Beach increased 50 percent compared to a year ago, to more than $ 1 million.
That’s over $ 700,000 in the same period last year, with more homes sold this year as well.
Ross Goudie, the longtime Waihi Beach community board chair, knows why.
“Auckland, Auckland, as they told me. Outside the district. It is not generated here. They have money in their pocket,” Goudie said.
High costs of living in major centers were sending some people to pack, collect and search for a slice of what Goudie considers paradise, he said.
“I hope they stay, I hope they come here to live, not just to come here for three weeks a year.”
In fact, they can be families: The local school had 29 new enrollments in the last quarter and about the same for the beginning of next year, he said.
But the money coming in made things difficult for the locals who rented, especially the young people who ran the place: teachers, cafeteria staff, and other essential vocations.
“You have to be in a reasonably well-off situation to be able to afford a place in Waihi Beach now. It’s the people who run the city, do the things that need to be done, and own the businesses; they can’t pay the rent here, they can barely afford to live here unless they’ve been here a long time, “Goudie said.
Independent economist Benje Patterson said that with money “for sale,” places with low housing supplies are likely to see prices farther from the truth and more out of reach for non-homeowners.
As a result, there could be perverse social outcomes.
“It is broader than just a political risk. It is economic, it returns to productivity. But it is also a social risk. It is something that is not just a risk here and now, but will turn out to be intergenerational unless we fix it.” “Said Patterson.
With young people struggling to establish themselves in these cities, that could cause real problems down the road.
“For example, at Coromandel, salaries and job opportunities are actually very limited. Those who live there and work in hospitality or retail to serve these people with vacation homes, find it very difficult to afford not only to buy, but even rent in their local areas. “
Real Estate Institute spokesman Dee Crooks said 10,000 homes were sold last month, the biggest November in 14 years.
“There is a lot of activity, people who want to buy and enter the market. There is a fear of getting lost,” Crooks said.
He said loan-to-value restrictions to be imposed next year had led some people to move into a home more quickly.
