The South Island’s housing market is booming – well, most of it is. Property values in Canterbury, Otago, Southland and West Coast all hit new peaks this year, riding the wave of an economic revival and affordability.
But residents at the top of the island could be forgiven for feeling left out. The average property value in Marlborough, Nelson and Tasman has been more or less flat since the market bottomed out in 2023.
Nelson has fared particularly poorly. Average property values remain about $136,000 below their 2022 peak, underlining just how slow the recovery has been.
The upper South Island has had no shortage of headwinds. Since the downturn, the regions have grappled with job losses, infrastructure pressures and concerns over healthcare services. But the issue that has struck homeowners most directly has been repeated flooding.
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Successive storms have battered communities across Nelson, Tasman and Marlborough, causing widespread damage, disrupting transport links and leaving property owners facing mounting repair bills and uncertainty.
The impact has been so significant that it has attracted international attention. UK television personality and Nelson business owner Noel Edmonds touched on the region’s weather challenges in his reality series Noel Edmonds’ Kiwi Adventure.
“When you come to New Zealand, you change your view about the relationship between weather and the economy,” he told viewers at one point.
Yet there are signs of optimism. Nelson mayor and former National cabinet minister Nick Smith believes the region can benefit from the stronger economic momentum building elsewhere in the South Island.
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He said the past year had been challenging, with businesses exiting Nelson and neighbouring Marlborough grappling with a downturn in the wine industry. However, the improving fortunes of nearby regions gave him confidence the upper South Island’s recovery would eventually gather pace.
Smith told OneRoof: “Nelson hasn’t recovered as strongly as our regions to the south, but I’m optimistic that the wave of recovery is coming our way. It’s certainly my experience that the recovery from the GFC, the recovery from the economic crisis back in 1998-99 and from the share market crash in 1987 started in the south and moved north.
“I’m feeling more confident about the Nelson economy than I have in many years – certainly the most optimistic since I’ve been mayor. And that’s because of things like the building consents being up 35% and our GDP growth being stronger than the national average. But it isn’t as strong as the rest of the South Island.”
The upper South Island is home to some of New Zealand’s best coastal scenery. Photo / Getty Images
Nelson mayor Nick Smith is “hopeful” his city will soon benefit from the rest of South Island’s strong economy. Photo / Getty Images
TV star Noel Edmonds: “When you come to New Zealand, you change your view about the relationship between weather and the economy.” Photo / Supplied
Smith also pointed to new investment in Nelson. The Government was spending $500m on the redevelopment of Nelson Hospital, he said, and a further $70m-plus was being invested into the Bridge to Better project, aimed at developing infrastructure to accommodate 1000 new homes in the city centre. Two residential developments, Maitahi Village and Oakland Estates, in the Nelson-Tasman region, had also received fast-track approvals.
Smith said that Nelson was an attractive proposition for some because it was the sunniest, safest and most active place to live in New Zealand. “We certainly have strong growth in our city’s retirement villages.”
Westpac chief economist Kelly Eckhold believed the regions’ struggling horticultural sector was a restraint on the economy there.
“A lot of that seems to come down to the weight of the horticultural sector, and in particular the wine sector for that region, and that’s the one agricultural sector that’s doing really poorly right now. They are having to rip out grapevines; they’ve got too much wine [and] the prices are really depressed.”
Real estate agent Glenn Dick, director of Bayleys Nelson and Marlborough, said the fact that the top of the South Island wasn’t booming like Canterbury, Otago and Southland didn’t mean it was doing badly.
4 Aroha Way, in Yelverton, Marlborough, is looking for offers over $465,000. Photo / Supplied
At the upper end of the Tasman market is an architectural escape at 1397 Abel Tasman Drive, Tata Beach. Photo / Supplied
“The South Island in general is very strong, led by Canterbury and Queenstown/Wānaka,” he told OneRoof.
“They are going strong, but just because they are going strong doesn’t mean that Nelson and Marlborough are weakening.”
He said tracking for the regions was similar to a lot of markets in the North Island. “I’ve just been looking at the stats of Gisborne, I’ve been looking at the stats of Hawke’s Bay, Palmerston North, King Country, Taranaki and all their stats are the same as ours.”
Dick said the agency was still getting good interest in the properties they had recently listed, mainly from locals looking to upgrade or downsize, but also from people looking to relocate to the top of South Island.
“[Interest] from people in Canterbury, from people in Auckland, Tauranga and the like to come and move here to the top of the South. So, we are still doing OK.
“It’s sunny, dry, warm; it’s good for BBQs, good for swimming. We’ve got all these national parks, and it’s cheap. You should see the price of parking, it’s a joke – it’s so cheap in Nelson and Blenheim.”
42 Best Road, Upper Moutere, is proving popular with buyers, says listing agent Rebecca K. Photo / Supplied
A lifestyle estate at 14 Suncrest Drive, Tasman, is looking for offers over $1.469m. Photo / Supplied
Entry-level properties in both Nelson and Marlborough can be bought for less than $500,000, with a two-bedroom home for sale at 4 Aroha Way, in Blenheim, inviting buyer enquiry over $465,000. Bayleys also has a three-bedroom home at 26 Rintoul Place, in Brightwater, inviting offers over $620,000, and an award-winning architectural home at 1397 Abel Tasman Drive, in Golden Bay, up for grabs with an RV of $1.57m.
Dick said lifestyle properties also offered good value for money, pointing to the $1.5m sale of a three-bedroom Marlborough home with its own vineyard this month.
“That’s a classic example of a beautiful, beautiful lifestyle property for $1.5m.”
K Real Estate owner Rebecca K said it was hard to figure out why the region was trailing behind the rest of the South Island regions. “We are still epically busy - multiple offers etc. Things come to the market and are under offer within a week,” she said.
Recent sales include a four-bedroom on Goddard Road, in Upper Moutere, which had an asking price of $900,000, and a three-bedroom house on Atkins Street, in Motueka, inviting offers over $629,000.
Also proving popular with buyers are a three-bedroom lifestyle property at 42 Best Street, in Upper Moutere, which is looking for offers over $1.075m, and a lifestyle property at 14 Suncrest Drive, in Tasman, which is listed for over $1.469m.
“Buyers below $1m are definitely willing to get their hands out of their pockets.”
K said deals were usually conditional and did take work because it was harder for some buyers to get finance. Others wanted everything that came up in the builder’s report addressed, which they would have previously let slide in a hotter market.
Other parts of the upper South Island, such as Blenheim, were doing it tough and she knew agents who were leaving the industry. “Obviously, viticulture is their main industry, and that’s getting hammered at the moment.”
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