Quick 30+ Year History of Stoke, Nelson Home Prices.
Amongst all the talk about prices rising too quickly, etc one thing that doesn’t appear to have been covered is the fact that on average in my locality home prices have indeed been doubling every 10 years since the 1970’s, quite possibly earlier.
In so saying we did experience, like I am sure most areas did, a pause in the late 90s – early 2000’s.
For those many folk who were expecting the doubling to continue, that period around 1997-2002 saw a protracted slowdown in this pattern, almost a “go-slow.”
With the age of the Internet area, and its associated boom, closely followed by the sharemarket explosion, many were starting to question the age old adage about investing in “bricks and mortar” as being still relevant.
That period saw many dispense with their property asset or bow out of their investment property to cash up and take advantage of that “boom” share market or other perceived “better returning” diversified investments.
It wouldn’t surprise me if a trip to the Nelson City library would uncover that back in 1965 home prices were half of what they were in 1975.
As I’ve mentioned before, our company luckily has a local zone that we use as an unofficial regional litmus test.
We use an area of Stoke locally known as Poets Corner, as it’s an area where most homes are with-in 500m of the main Stoke Shopping area, and where dozens and dozens of standard 90-100m2 three bedroom homes, mostly weatherboard or stucco, were built on flat rectangular 607m2 sections in the 1960’s. Courtesy of that, we are afforded some consistency there, and have found it has rendered itself as quite a reliable gauge over the past 3-4 decades.
If you’re curious about the local nickname, it comes from the fact that the streets there are named after famous English Poets, so therefore we have St’s, Rd’s and Cresents named Kipling, Keats, Tennyson, Dickens, Keats, Marlowe, etc…… I think you get the picture.
In 1975 the average price for a standard basic 3 bedroom dwelling in “Poets Corner” was $35k, rising to $70k by the mid 80’s. By 1995 the average price was around $140k. Then fast forwarding to 2005, $280k was definitely on the mark. That last decade prior to 2005 however was quite a drawn out affair, with no action / real price movement for 7-8 years followed by a zippy 1-2 year catchup at the end.
Will history repeat itself, in 2015 will home prices be double what they were in 2005? Well if most commentators in the media are to be believed, then no. With such a small population, and with such a limited amount of land with which to focus any new building on, we definitely have a very tight supply situation in Nelson. That’s not the case in nearby Tasman District as they do still have space and spare land to build on.
Unlike us, they don’t suffer from the fact that 99% of our population live with-in 5km of the coastline. That’s mainly because of the hills that track / skirt along behind and around us. However, I’m not yet convinced that in our local case it won’t repeat itself?
My own personal local experience, well my parents brought their home in Marsden Road back in 1973 for $23,000. And when I saw the property being advertised back in 2006 For Sale by Owner, I knew I could add a personal touch, so I phoned up the owner. Long story short, they ended up listing with me and I sold the home a short time later, 33 years after my parents had first purchased it, for $355,000. It had passed through 4 or 5 owners since Mum & Dad had owned it, but still a tidy return I’d say.
March 20 2009 | Nelson | No Comments »
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