Sunday, 16 December 2018

WHITIANGA WEATHER

Thames-Coromandel economy still a strong performer

The Thames-Coromandel economy is still a strong performer when we are compared with the rest of the country, but waning house prices is something to watch out for, an economist warns.

The latest quarterly economic data release from economic development agency Infometrics reveals Gross Domestic Product (GDP) in Thames-Coromandel grew 3.8% in the year to September 2018, slightly above the 3.5% growth rate for the wider Waikato region and well above 2.9% growth rate nationally.

The economy has now been growing at an above-average growth rate for more than three years. The strong performance is helping to create jobs in our region and an average unemployment rate of 2.9%, well below the national average of 4.3%.

However, new data for the three months to September, suggests there are some red flags in our local residential property market, says Infometrics senior economist Benje Paterson.

House sales and residential consents fell again in the last three months to September, and house prices dropped for the first time since 2013.

Looking at the year as a whole, house prices fell 4.1% in the September 2018 year, bucking both national and regional trends.

“It’s not a huge concern, but it’s something to watch because housing is a big part of the local economy,” Benje says. “House prices can be a signal of what people do in the property market and how confident they feel about things."

House sales have also been falling around the country since mid-2016, Benje says.

“In the September 2018 year they fell 12 per cent. However, results for the last three quarters have been flat, which could mean sales are about to turn the corner,” Benje says.

"Residential consents declined 12% in the September 2018 year, greater than the 2.2% fall across the Waikato region and in contrast to 5.4% growth nationally. But the district’s 17% rise in non-residential consents in the September 2018 year will help keep local construction firms busy," he says.

The latest QV House Price Index by Quotable Value indicates house price growth has slowed in many parts of the country. Nationally, property values lifted 1.3% over the three months to November. They were up 3.5% over the year.

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The Mercury Bay Informer is a highly popular community newspaper, based in Whitianga. The paper is distributed throughout the Coromandel Peninsula, coast to coast from Thames to north of Colville.