TelferYoung (Nelson) Limited
Current | 2008 | 2007 | 2006 | 2004
Nelson Newsletter - February 2006
1 January 2006
TelferYoung (Nelson) welcomes Wayne Wootton and Ashley Stevens.
 Ashley Stevens and Wayne Wootton |
We are also pleased to introduce Ashley Stevens. Ashley joins us from Palmerston North where he had 6 months valuation experience following completion of his Batchelor of Business Studies Degree at Massey University. Ashley assists our four registered valuers with preparation in property inspections, spread sheeting and special duties. He is working towards registration as a valuer.
TelferYoung (Nelson) provides clients with four experienced registered valuers offering valuation and advisory expertise across the full range of property type. Ian McKeage, Rod Baxendine, Bryan Paul and Wayne Wootton are supported by Ashely Stevens, as a graduate valuer. The office is run by Carolyn Nunn, our Office Manager who is ably supported by Jill Jordan and Serena Williamson.
Rural
The rural market place is relatively quiet. There has been very little activity in the forestry market which has been adversely affected by exchange rates, fuel costs and shipping costs. Recent media releases indicate that the larger forestry companies are looking to exit the Nelson market.
International meat and dairy product prices have been at all time highs and are currently trending backwards, which would suggest a period of slower activity. History suggests that it would take significant readjustment in farm income to reflect in reduced sale prices for farm land.
Rural Residential
A feature of the Nelson/Tasman market is the gradual change in use of recently re-zoned Rural 3 land through the coastal belt from Richmond to Tasman. This land has been identified by Tasman District Council to satisfy rural residential growth for the next 15 to 20 years.
Consent has been granted for several new subdivisions which now gives prospective developers a better understanding of how the zone changes and subsequent development can be undertaken.
With the lifestyle or rural/residential market being reasonably slow at present it will be interesting to monitor the gradual development of this large area of land.
Historically there were a lot of pip fruit orchards, pastoral properties and forestry on this type of country. Typically it lies to the east through to west with a variety of rural and coastal views and has the ability to yield a variety of site areas in a reasonably wide range of values. It was not seen as prime productive rural land, mostly being clay rolling country, prone to drought.
Attention Residential Investors
A region by region comparison that most can relate to is the housing market. Across the board, provincial centres such as Whangarei, Hamilton, Tauranga, Napier, New Plymouth and Invercargill have out-performed the major Metropolitan areas in terms of value growth over the past 20 months. The median house price in these six centres has increased by between 30% and 75% over this period. Median house price comparison can be distorted, especially within a locality with a varied level of property types and values. It is however a fairly useful comparative tool between regions.
The exception to this provincial sector growth is Nelson. The Nelson market peaked in late 2003 and has been fluctuating around that level ever since. The median house price in Nelson in December 2003 was $310,000 and is now $280,000. The median house prices over the other provincial areas in December 2005 ranged from $135,000 in Invercargill to $350,000 in Tauranga. With the exclusion of Invercargill, the range is between $267,000 in Whangarei and $350,000 in Tauranga.
Nelson lead the country into the high growth sector of the property cycle, but it has also been the first region to slow. We suggest these other regions are in the process of slowing now. Where ever you are located, seeking TelferYoung advice prior to making your next property decision may help clarify these general statistics and provide you with invaluable knowledge of the local market.
We believe provincial areas including Nelson, Taranaki, Hawke's Bay, Northland and Southland, are well positioned to lead the country out of any depressed property market. They are strong in primary production and not as reliant upon commerce or manufacturing as the Metropolitan centres.
Nelson for example is fairly reliant upon the "Four F's", of Fruit, Fisheries, Forestry and Foreigners. All are adversely affected by the high New Zealand dollar. Other issues such as shipping costs being 200% above three years ago, fuel costs at all-time highs, and general cost increases are factors that further test operators in these industries.
Strong pastoral areas such as Waikato, Taranaki/Manawatu, Canterbury and Southland are less affected by the exchange rate levels due to the high beef, lamb and dairy commodity prices. At rates of around 70c $US and 92c $Aust, our primary producers are still competitive internationally. If the dollar drops to a level of 55c to 60c US then these industries will lead to spending and investment in the provincial areas.
A high percentage of residential investors have fixed interest mortgages for two to three years. The Reserve Bank emphasis is on interest rate increases to influence the market, however only a small percentage of lenders who are on floating rate mortgages are directly affected. The Reserve Bank needs to continue putting pressure on the banks to tighten credit criteria.
If the New Zealand dollar falls significantly, then the provincial areas are positioned well for value growth on the back of rural spending and general confidence.
Regional Statistics
| Number of Residential Dwelling Sales |
Vacant Section Sales | ||||
| 2005/2006 | Richmond | Nelson | Richmond | Nelson | |
| February | 30 | 125 | 4 | 28 | |
| March | 35 | 128 | 4 | 12 | |
| April | 32 | 84 | 2 | 17 | |
| May | 28 | 99 | 3 | 16 | |
| June | 25 | 101 | 4 | 19 | |
| July | 30 | 78 | 1 | 12 | |
| August | 23 | 80 | 3 | 25 | |
| September | 24 | 74 | 3 | 14 | |
| October | 18 | 86 | 2 | 16 | |
| November | 22 | 95 | 2 | 10 | |
| December | 23 | 83 | 2 | 5 | |
| January 06 | 25 | 56 | 1 | 3 | |
If you enjoy our Newsletter and would prefer to receive it via email please send your email address to Carolyn Nunn.
Back issues of the newsletter can be obtained from TelferYoung (Nelson) Ltd
Phone (03) 546-9600
Fax (03) 546-9186
www.telferyoung.com
email: telferyoung@nelson.telferyoung.com
Opinions expressed in this newsletter are of a general nature and should be used as a guide only. TelferYoung should be consulted before acting on this information.