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Population increase and more visitors boost Coromandel economy

Coromandel Peninsula | Tue November 28, 2017

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Retail spending was up 8.3 percent in our district over the year to September, driven by a rise in the population and by increasing visitor numbers.

The lastest Quarterly Economic Monitor from independent economic analysis firm Infometrics says the Coromandel economy expanded at a healthy rate over the winter - 3.3 percent GDP growth for the September year, higher than the national average of 2.5 percent . Our district's Gross Domestic Product, or GDP, rose to $1.036B as of September.

Most indicators are expanding, says Infometrics, with vehicle registrations, visitor activity and homebuilding particularly strong.

Infometrics says population growth is a key factor in pushing up demand. Statistics New Zealand estimates our district's population grew 2.1 percent over the year ending in June, to 29,000 residents, following 2.2 percent growth the previous year. The average population growth over the last decade has been 0.8 percent.

"This shows more people want to come to the Coromandel - not just to visit, but to live here - because it is a great place to live, work and play," says our Mayor, Sandra Goudie.

"That's why we've been investing - and will continue to invest - in core infrastructure, like upgrades to our water supply systems, and in community facilities such as playgrounds and reserves," says Mayor Sandra. "We want to have the infrastructure to attract businesses to the Coromandel - and we also want to maintain the great quality of life we have here for all the new people choosing to make their home in our piece of paradise."

The Infometrics report says retail spending increased 8.3 percent over the last year to reach $93.9M in the quarter ending in September - driven by the population growth and also by increasing visitor numbers.

Visitor spending in our district increased 7.8 percent to $357M over the year that ended in September while commercial guest nights were up 5.6 percent over the same period to 759,681. And, Airbnb listings in the Coromandel rose from 529 in October 2016 to 889 in September this year, Infometrics says.

Commodity prices have risen in forestry, horticulture and seafood and the NZ dollar has fallen recently against major currencies - all grounds for optimism about the year ahead for people working directly in the primary sector or in businesses servicing that sector.

The population growth as pushed up housing demand but Infometrics sees signs that housing market activity is moderating. House sales volumes have dropped 23 percent to 1,028 in the Coromandel over the year to September.

A risk for the local market over the coming year will a cooling Auckland market, says Infometrics. "Lower house prices in Auckland reduce the incentives for Aucklanders to search for lifestyle options in neighbouring district," says Infometrics. And: "Impending government moves to tighten up taxation for investment properties, including holiday homes, must also be factored in."

Nationally, Infometrics sees a "rosy economic growth outlook", but this carries with it an increase in inflation and the prospect of mortgage rates beginning to creep up later next year.

The full Infometrics report is available on the TCDC website. 

 


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