Provinces begin to rise

[Paul34]

http://www.stuff.co.nz/business/property/88983749/provincial-house-prices-enjoy-their-turn-in-the-sun

What is interesting about this is how it seems to be following the previous cycles, both regarding the ripple effects, and these big catch ups that the provinces have. I was talking to someone in Palmy and areas that are around Palmy like Feilding and Pahiatua seem to the new hot spots for people who can't buy in Palmy. The price rise is causing rental rises and homes to rise. Masterton and the Wairarapa has a rental crisis according to the news!

I also find the responses from the provinces to be interesting. In looking at their district plans, many councils have very aggressive plans to address the changing demographics. Whether successful or not time will tell, but it is interesting to watch. The Wanganui wharf is a classic case in point. http://www.stuff.co.nz/business/indu...-link-proposal.

It is a great social expt to watch. Does NZ have a unique global advanatge, thus attracting foreigners, and will the strategies of the provinces be enough to attract foreign capital and/or internal migration to these areas?

The next couple of years will be interesting to watch these trends and see what, if anything, comes to fruition.

[drelly]

I think that's a bit of a space filler article. The provinces started rising two years ago!

[Nick G]

Yep I agree

[Halfway To Paradise]

I think its time to do some cashing in and sell off some of the poorer performing properties.

[drelly]

I'm selling a few off. The idea of clearing my debt is very appealing. I'm going to build some cash up and see what opportunities pop up in the next year or two.

[RollingCloud]

"In Paeroa, near Waihi, Connie Muir of Harcourts said her town was just an hour's drive from Manukau, Hamilton and Tauranga and seeing a big lift in house buyers."

I'd love to see someone drive from Paeroa to Tauranga in an hour! Just as misleading as real estate blurbs, when they say 5 minute walk or drive to the beach.

[Aston]

I'd love to see someone drive from Paeroa to Tauranga in an hour! Just as misleading as real estate blurbs, when they say 5 minute walk or drive to the beach.

I agree about the misleading quotes from Real Estate Agents, I think they all tend to expand on the facts a bit. I'm looking at an apartment at the moment with "Wide Sea views." It turns out the the apartment block in front of the one I am looking at is planning to build up, almost totally blocking the sea views of the apartment I'm looking at.

BTW. Paeroa to Tauranga is very do-able in an hour. I drive Paeroa to Bethlehem several times a week, it never takes me longer than an hour.

[PTWhatAGreatForum]

We live in that general region. While I don't trust REA's claims one bit, anecdotally I can state there is almost nothing for sale here now.

There is more affordable property for sale in town then here - which is about 20km drive to town.

I have no idea why this is...?

[Halfway To Paradise]

Drelly I am in the same mind, my view on investing has changed since I started when my main priority was spread risk. I used to think go for 2 x 2 bedroom properties rather than one 4 bed. I was fearful of not having a tenant in 4 bed but thought if I didn't have one in one of the 2 beds the other one would help me cover bills. Now I never worry about empty properties as I know a tenant is not far away.

[JBM]

Provinces got to rise just try a find a rental property in Otago outside Dunedin ....not cheap or many at all ....never have any issues getting tenants

[drelly]

Drelly I am in the same mind, my view on investing has changed since I started when my main priority was spread risk. I used to think go for 2 x 2 bedroom properties rather than one 4 bed. I was fearful of not having a tenant in 4 bed but thought if I didn't have one in one of the 2 beds the other one would help me cover bills. Now I never worry about empty properties as I know a tenant is not far away.

Experience certainly helps with confidence in investing... also not being as financially weak as when I started! I'll probably reinvest but differently to before. Better quality properties, new builds or maybe a subdivision.

[Paul34]

And now the rent rises:

http://www.stuff.co.nz/business/property/89072461/rent-growing-faster-outside-auckland-christchurch-infometrics

This is interesting as an infometrics report. One quote I found especially interesting in the article was as follows:
"Yes, [the provinces] have had strong population growth but they're not starting from the same point of undersupply as Auckland.

"And so you run the risk of overbuilding at the same time as population growth eases and interest rates rise."

In many provinces the building costs are un ecomically due to low land value and low resale value. So this undersupply problem may be even more stark in these areas as, in gross number of houses, there is quickly and under supply.

The gap between say the fringe and the city is so great that the comparative rental rise could be quite great and still be well within the means of the tenant population.

As mentioned at the beginning of the thread an interesting social shift to watch.

[Halfway To Paradise]

Experience certainly helps with confidence in investing... also not being as financially weak as when I started! I'll probably reinvest but differently to before. Better quality properties, new builds or maybe a subdivision.

Yes! better quality properties. Where I may forgo a little on yield I will save on repairs. I read some interesting comments on this site about repair expenditure on this site. It was very clear people with the newer properties were paying a lot less as percentage of rental income than those with older properties. New builds is also an interesting option, but not a lot of those happening in Rotorua. I am not a fan of investing outside of my area. I like the re-assurance of being able to drive past my properties.

[drelly]

I am not a fan of investing outside of my area. I like the re-assurance of being able to drive past my properties.

I'd agree with that if self-managing. I think if I invested more than 30 mins away, I'd probably use a property manager next time.

[Halfway To Paradise]

I'd agree with that if self-managing. I think if I invested more than 30 mins away, I'd probably use a property manager next time.

It is not appropriate for me to self manage, due to my line of work I need to maintain annoniymity so my tenants or prospective tenants don't know who I am.