Taranaki, the “bump” on the west coast of the North Island, has played a foundational role throughout New Zealand’s history.

The spirit of its maunga – Mount Taranaki – has guided people there for hundreds of years. It’s central to what the area is and the mauri, or spirit of the region.

Located halfway between the main centres of Auckland and Wellington, Taranaki is home to 127,300 people, most of whom live in the coastal city of New Plymouth. The region is split into three districts, each with its own council: New Plymouth to the north with a population of 87,700; Stratford in central Taranaki with a population of 10,150; and South Taranaki, which includes the main centre of Hāwera, with a population of 29,600.

People who choose to make New Plymouth their home, no matter what suburb they live in, will be just minutes away from the city centre, and it’s likely to take them no more than 10 minutes to commute to work each day.

The region is at the forefront of the transformation of New Zealand’s food and energy sectors with game-changing projects such as sustainable hydrogen fuel production.

As a result, it has the fourth highest GDP per capita in New Zealand. Total GDP was $10,241 million at the year ended March 2023 and per capita was $80,072; significantly higher than the national average of $75,311 thanks to a robust economy and population that’s big enough to sustain new business. What’s more, Taranaki has the highest median wage growth in New Zealand.

Adding to the GDP are super smart entrepreneurs capitalising on clever innovation, such as diversifying land use so sheep and beef run alongside high-yield quinoa production. There is also a new breed of specialised farms, gardens (some in urban spaces) and markets providing fresh, healthy produce.

Many new arrivals make the most of the opportunity to start a venture they have been dreaming of. With the use of modern technology, it’s also possible to live in Taranaki while working throughout New Zealand or the world.

Low Emissions

Taranaki is fiercely protective of its environment through multiple schemes and projects. Initiatives like Ara Ake, New Zealand’s new energy development centre, will help the whole country move towards a low-emissions future. The country’s first totally “green” school has also been opened and will help with the region’s plan to be a zero-waste region by 2040.

Hāwera, Stratford, Inglewood, Waitara, Ōakura, Ōpunake, Urenui and many of the other towns throughout Taranaki provide an inviting alternative to city living.

In these smaller communities there are homes on spacious sections and lifestyle blocks with sea and/or mountain views, while house prices have not plummeted in the past year, unlike some other areas of the country.

CoreLogic data shows house prices have done the opposite and risen from 1.2 per cent to 7.5 per cent over the year to July 1.

Patea had the biggest increase at 7.5 per cent, rising from $283,150 to $304,250, followed by Vogeltown, increasing 4.2 per cent from $589,700 to $614,450 and Brooklands rising 3.6 per cent from $652,600 to $676,000.

At the other end of the scale, Marfell house prices rose 1.2 per cent from $496,200 to $502,000, while prices in Westown increased 1.4 per cent from $633,400 to $642,200 and in Waitara they rose by 1.6 per cent from $471,700 to $479,400.

The region has been relatively isolated from some of the challenges faced by the rest of the country in the property market, says Taranaki Realty managing director, Craig Nielsen.

Inventory has not increased at breakneck speed as it has around the rest of the country. In June there were 24 weeks of inventory, one week less than the same time last year.

“I’m not sure if it’s our geographical location, our market is smaller, or the fact we still have a big primary industry sector as well as oil and gas industries based here, but people haven’t run for the hills like they have in other regions.

“However, the market has definitely slowed a little bit in recent months, but enquiry has certainly started picking back up,” he says.

House Prices

Nielsen says there’s been a dip in house prices, and some are selling under capital value and equally others that are selling above. “There is no real trend, but we have noticed investors creeping out of the woodwork again after sitting on the fence for three to four years.”

He says whether it’s because of recent interest rate drops or the changes in tax policies, it’s hard to tell what their motivation is, but there are more investors in the market, some looking to buy and others to sell after a couple of years of having to top up their mortgages.

“The fact that investors are picking themselves up and first-time buyers are doing the same, there’s more of an air of optimism in the market than there has been in the past three or four months.”

Taranaki’s median sale price rose 10.7 per cent year-on-year to $631,000 in June, REINZ data shows.

REINZ chief executive Jen Baird says most vendors seem to be well-educated about market expectations in their area and most vendor prices are realistic.

But, says Nielsen, there are some properties that are staying on the market longer, but it comes down to a willing borrower and the willing seller to make things happen.

Most Taranaki buyers are local, but others are coming from Hamilton and Palmerston North, particularly targeting suburbs such as Brooklands and Vogeltown in New Plymouth as well as new builds.

The axing by the government of the First Home Grant scheme hasn’t helped first-home buyers, who generally look at houses in the $450,000 to $600,000 range. “Those relying on the last $5,000 the grant would give them have been unable to buy. Possibly they weren’t in a position to buy anyway, but the scheme did make a difference.”

First-home buyers and investors are competing in the lower price ranges. Nielsen says those properties might not be in the best of areas, but for first-home buyers they have to take their rose-tinted goggles off and start somewhere.

Investors have the edge in being able to renovate if needed, while first-home buyers struggle to get extra finance to do the same job.

High interest rates and the cost of living remain the most significant factors influencing market sentiment, Nielsen says, with no notable shift from the last few months. However, once interest rates drop, he predicts a shift in sales volumes across the region.

Rental Market

Taranaki tenants have a bigger choice of rentals than they have had for some time.

Bayleys Real Estate Taranaki regional general manager Luke Conroy says rentals are becoming more readily available through legislation changes, the bright-line test rethink, and reinstatement of interest deductibility for landlords.

“These factors are determining what landlords will do with their property and at the same time giving more choice in what is available for tenants.”

While there is not an overflow of properties there are some sizeable construction projects coming up in Taranaki, Conroy says.

Bayleys has seen a 30 per cent rise in weekly rent year-on-year across the region to an average of $571 per week on a three-bedroom property. However, there have been properties where rent has had to be realigned to meet the market, and attract good tenants, particularly in the $700 a week and above range.

“It’s a lot of money and reducing rent does typically start to activate or reignite interest in these higher price properties,” Conroy says.

The Time To Buy

He expects rents to stay flat for the rest of the year. “Heat in rental prices has started to drop away slightly, but for a good-quality home there will still be a premium.

“Rents will stay fairly similar as the affordability of home ownership becomes more achievable for more people when interest rates drop.”

Demand for rentals has pulled back, which is typical for winter as renters tend to sit with what they have, Conroy says.

“A few people have seen opportunities if a nice rental comes up and it’s the same price or a bit less than they are paying. Some people are actively going to viewings and taking up those opportunities. Good rentals that are priced well are going quickly.”

New Plymouth’s The Strand and Fitzroy are popular rental areas for premium property, the city fringe for cheaper rentals, and Westown is popular for a different market. Rentals around the hospital are also in demand.

While the market is challenging, Conroy says investors often see this as a good time to buy, which it is, and they are slowly coming back.