General Economic Commentary, King Country, Year to June 2010

Doyle Valuations Ltd

General Economic Commentary, King Country, Year to June 2010 There appears to be a “Mexican standoff” in the rural market. Only 13 pastoral farms over 100ha have sold in the last 12 months, the average size at 285.90ha, the median price at $1,519,000. The average sale price per hectare is $5,676, a 23% drop on last quarter. Sale numbers have declined by 23.5%. From sales and anecdotal evidence, it is apparent that a significant drop of up to 40% in the value of land has occurred over the last 12 months. Only 6 dairy sales over 40ha were recorded, sale numbers still very low. The average size was 124.23ha, the median at $2,000,000. The average sale price per hectare is $19,426, a 26.5% decrease on last quarter.

11 smaller lifestyle blocks have sold over the last year in Taumarunui, sale numbers similar to the last quarter. The average lifestyle price was $261,000, the average size at 2.54ha. Prices have softened slightly.

The Te Kuiti lifestyle market had 14 sales this year, 26% less than the previous quarter. The average price was $262,928, the average size at 1.78ha.

In Otorohanga, $452,600 was the average, with the average size at 1.69ha. 11 sales were recorded, numbers significantly lower than the previous quarter. Prices have firmed slightly.

Ohakune showed the highest median house price at $225,000. Sale numbers have declined slightly but we are now heading into the busiest part of the season again. The average sale price was $239,457, with 37 sales recorded.

Taumarunui residential sale numbers for the year increased by 10% to 55. The median decreased by 3.7% to $130,000. The average sale price remained steady at $142,361. Based on the last 6-months alone, it appears as though sale numbers will improve slightly but the median is predicted to soften further. Real Estate agents report increasing enquiry.

The Te Kuiti median fell sharply to $134,000. Sale numbers fell by 11% to 41. The average sale price fell by 4.1% to $150,000. On the 6-month figures the median is predicted to rebound to around $150,000.

Otorohanga’s median fell by 10% to $185,000, a figure not seen since April 2007. Sale numbers increased by 10% to 41 for the year. The average sale price fell by 3.6% to $209,476. Indications are that the median house price will remain steady from here on.

The national median house price by comparison rose by 1.2% to $356,000. The REINZ Monthly Housing Price Index fell 0.4% for the month of April but rose 6.2% for the year. Doyle Valuations Ltd 2

Number of House Sales

50 Ohakune 40 Taum arunui 30 Te Kuiti 20 Otorohanga

10 0 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10

Median House Price

240000 220000 200000 Ohakune 180000 Otorohanga 160000 Te Kuiti 140000 Taum arunui 120000 100000

9 9 9 0 0 0 0 0 0 0 9 0 0 1 1 1 1 - -0 ------1 -1 - p t v c n b r r y n e c o e a e a p a u S O N D J F M A M J

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Median House Price

400000 350000 National 300000 median 250000 Ohakune 200000 150000 Otorohanga 100000 50000 Te Kuiti 0 Taumarunui 7 8 9 0 0 0 0 1 0 0 0 0 2 2 2 2

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The official cash rate remained steady at 2.50%. Inflation remained steady at 2.0% and unemployment has fallen to 6%.

This commentary encompasses the past years information and is updated on a quarterly basis. Its purpose is to illustrate property trends in the King Country, which is a region not normally reported upon. Whilst the information contained above may not be specifically relevant to the property being reported upon, it’s purpose is to provide a useful barometer for the towns and wider region. It is not intended to be used as, or take the place of, a valuation report, which provides specific and timely property advice. Any persons relying on this commentary do so at their own risk. For back issues, please log on to www.doylevaluations.co.nz

Jun10 Economic Commentary