West Coast Property Market

Is it worth buying a property in the West Coast? Explore the data and find out. Last updated 11th January 2021

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Ed McKnight

Economist, property investor and host of the Property Academy Podcast
Introduction

Looking to Invest or buy a property in the West Coast?

This article breaks down all the most essential facts about the West Coast property market.

The West Coast property market is made up of 3 districts and 14 suburbs. These districts are the Grey district, Westland and Buller.

Median West Coast House Price

West Coast’s Median House Price is $275,000

As at October 2021, the median house price in West Coast is $275,000. This is up from $220,000 10 years earlier. That means that the median West Coast property increased in value by 2.26% each year, or $5,500 on average.

The most expensive suburb in the West Coast is Moana, which had a median house price of $480,250 as at September 2021, and is located in Grey district. That means that Moana’s median house price is 1.43x the West Coast’s median.

The least expensive suburb in West Coast is Runanga, which has a median house price of $192,850 and is also located in Grey district. That means that Runanga’s median house price is 42.50% cheaper than the West Coast’s median.

Over the last 2 years (Sep 2019 - Sep 2021), Cobden had the fastest-growing house prices in all of the West Coast, at 21.89% per year. That is 53.86% faster than the median West Coast house price over the same period.

The suburb that grew the slowest over that period was Carters Beach, which grew at a rate of 10.46% per year. That’s 26.49% slower than the median West Coast house price.

West Coast’s House Prices v.s. NZ House Prices

West Coast’s Median House Price is 12.67% below its long term average

On average, over the last 28 years, the West Coast’s median house price has been 47.96% of New Zealand’s median house price.

Assuming the long term fundamentals of either property market have not changed, the West Coast’s median house price would track back to this long term average.

That would usually suggest that when the West Coast’s median house price is below its long term average, there is a buying opportunity. When West Coast’s median house price is above its long term average, that would usually suggest there are buying opportunities in other regions.

As of October 2021 the West Coast’s median house price was 35.29% of New Zealand’s median house price. That is 12.67% below its long term ratio. That would usually suggest there is a buying opportunity in West Coast – as long as the long term fundamentals of the market haven’t changed.

However, our view is that long term fundamentals of the West Coast property market have changed. That means that this model’s conclusion – that the West Coast is under-priced compared to its long term average – would not hold in this situation.

What has structurally changed in the West Coast?

The West Coast is the only region in NZ where the population is forecast to decline over the next 20 years. As New Zealand’s population grows, the West Coast will make up a smaller and smaller proportion of the overall population.

That means that even if no more houses are built in the region, there will be more houses per person over time. This limits the ability for house prices to rise in the region since there will always be ample supply.

The West Coast’s economy has structurally changed over the last 2 decades. The mining industry, previously one of the West Coast’s main industries, has declined significantly. In addition to this, tourism makes up 16% of the West Coast’s economy. This will be significantly negatively impacted by the Covid-19 epidemic.

That is why we believe that the West Coast property market will not likely return to its long term average position at 48.36% of New Zealand’s median house price.

Council Breakdown – Over/Undervalued

Where are House Prices Most Over and Undervalued within the West Coast Region?

This map shows a breakdown of how over or under-valued each council area is right now in the West Coast property market. These figures are calculated exactly the same way as the graph in the above section.

Westland district, on the other hand, appears to be less under-valued. House prices in this district appear to be 21.75% below where we would expect them to be.

Grey district appears to be the most under-valued. House prices there are about 29.97% below where we would usually expect them to be over the long term.

This means that we've got greater confidence that Grey District would receive a higher rate of capital growth (house price increases) over the next 5-10 years compared to Westland.

Affordability

Where Are the Most Affordable Property In the Waikato?

The map below depicts which districts within the West Coast Region have the most and least affordable house prices (Core Logic, July 2021).

The darker the district, the more expensive the average house price for that area...

The Westland district is the most expensive district within the West Coast region, with properties reaching an average price of $330,071 (July 2021).

By comparison, the Buller District is the most affordable, with an average house price of just $274,627. That's a slight $55,444 difference compared to Thames-Coromandel.

Population Growth

Which Part of The West Coast Gets The Highest Population Growth?

The map below illustrates the projected population growth for each district within the West Coast Region over the next 25 years (2018 - 2043).

The darker the district, the more the population is predicted to expand in that area...

Over this period, the Grey district is expected to see the most shrinking of all the council areas within the region – 7.35% in total.

By contrast, the Westland district is expected to shrink by 3.95% over the same timeframe.

Buller Property Market

Buller Property Market

The Buller district is made up of 4 suburbs. The most expensive suburb is Carters Beach, which has a median house price of $364,800. While the most affordable suburb is Reefton, which has a median house price of $244,450.

Over the last 2 years, of all Buller district suburbs (Sep 2019 - Sep 2021), Westport had the fastest-growing house, at 14.23% per year. That is at par with the median West Coast house price over the same timeframe.

The suburb that grew the slowest over that period was Carters Beach, which grew at a rate of 10.46% per year. That’s 26.49% slower than the median West Coast house price.

Grey Property Market

Grey Property Market

The Grey district is made up of 8 suburbs. The most expensive suburb is Moana, which had a median house price of $480,250 as of September 2021. While the most affordable suburb is Runanga, which has a median house price of $192,850.

Over the last 24 months of all Grey district suburbs (Sep 2019 - Sep 2021), Cobden had the fastest-growing house, at 21.89% per year. That is 53.86% faster than the median West Coast house price over the same timeframe.

The suburb that grew the slowest over that period was Paroa, which grew at a rate of 12.91% per year. That’s 9.27% slower than the median West Coast house price.

Westland Property Market

Westland Property Market

The Westland district is made up of 2 suburbs. The most expensive suburb is Kaniere, which has a median house price of $386,200. While the most affordable suburb is Hokitika, which has a median house price of $338,800.

Over the last 24 months of all Westland district suburbs (Sep 2019 - Sep 2021), Hokitika had the fastest-growing house, at 12.51% per year. That is 12.06% slower than the median West Coast house price over the same timeframe.

The suburb that grew the slowest over that period was Kaniere, which grew at a rate of 11.47% per year. That’s 19.35% slower than the median West Coast house price.

Other Property Markets

Other Property Markets to Look Into

If you found this article useful, then you might also like our analyses on the other property markets in New Zealand. You can read all about the Auckland property market, the Wellington property market and the Christchurch property market by clicking any of the links mentioned here.

1601614029185

Ed McKnight

Ed McKnight is the host of the Property Academy Podcast – NZ's #1 business podcast. He is an economist, having studied at the University of Auckland and the University of Waikato. He's a frequent writer for Informed Investor Magazine and has contributed to NewsHub, Stuff, OneRoof and Property Investor Magazine.