Property values in Southland and the Queenstown Lakes district have more than doubled in the past decade and an economist says while this could benefit some, it might not be good for economic progress.
Data from realestate.co.nz showed from the beginning of 2015 to the end of 2024, average asking prices in Southland increased 112.2%, Central Otago-Queenstown Lakes rose 106.6% and Otago was up 98.6%.
Nationally, the average asking price stopped short of doubling, rising 60.3% over 10 years, from $556,931 in 2015 to $892,579 in 2024.
Realestate.co.nz spokeswoman Vanessa Williams said the biggest price jumps happened outside New Zealand’s main centres.
"These figures show the growing appeal of regional New Zealand."
Infometrics chief executive and principal economist Brad Olsen said there were some "pretty crazy moves" in the housing market during this period and what the data showed was many factors drove the housing market.
Some of it was around the supply of housing, some of it was around the demand, he said.
"Part of the reason we’ve seen those house price increases across the country, but also down in Otago and Southland, is you’ve seen a lot of demand, and certainly over the last decade, decade and a-half, not quite as much of an increase in supply up until sort of more recently.
"The question, I guess, for a lot of people is, OK, that’s history — what’s going to happen next? And certainly our expectation is that you might not have quite as much further house price growth over the next couple of years as we might have previously."
When asked if such growth was good for the country’s economy, he said the house price increases in some areas were "obscene and not good for economic progress".
While someone who owned a house felt a bit richer and able to sell their property for more than they invested, for someone who wanted to get into the market, it could be more difficult.
"Although the likes of house prices might have doubled in some areas over the last nine years or so, incomes haven’t doubled and headline inflation hasn’t doubled.
"If you look at some of the houses across the country, and this will be true in Otago, Southland as well, it’s pretty hard to say that that exact same house — which nothing’s happened to it in the last — it’s now worth double the amount of money ... That’s increasingly hard to stomach and I think it suggests that we have, as a country, had a real fascination with housing over time and that’s meant that we’ve generally ploughed more and more money into it."
Bayleys licensed salespeople Geoff and Hannah Mason said the data was not overly surprising, particularly given the huge demand and sharp jump in sale prices during the Covid-19 pandemic.
"Like any investment, property is a long game and we need to be mindful that these statistics are based on the average asking price, not the average sale price.
"We consider that the Southland housing market is slowly starting to catch up with the rest of the country, and is perhaps an indication that Southland is the place to be."
