Thriving housing market helps Waikato economy, offsets the dairy sector's struggles

Waikato dropped four places in the March quarter on the scoreboard, down to eight out of the 16 regions in ASB's regional economic scoreboard report. Part of the blame placed of the dairy downturn.

Low milk prices have taken a toll on the dairy heavy regions, according to ASB's new regional economic scoreboard report.

Waikato dropped four places in the March quarter on the scoreboard, down to eighth out of the 16 regions, with part of the blame placed of the dairy downturn.

The report did not paint a pretty picture for the region with a decline in jobs compared to March last year and consumer confidence taking a hit. 

However, Waikato's thriving housing market gave the region the edge over other dairy heavy regions. 

ASB Chief Economist Nick Tuffley said the halo affect from Auckland property prices was helping to keep Waikato afloat.

Aucklanders were being priced out of their own market and buying in other centres like Hamilton, pushing up the prices in those regions.

Real Estate Institute March figures showed property sales were booming in the Waikato.

Hamilton's median house price sales had risen 7.5 per cent in March alone.

However, since March 2015 the median house price in Hamilton increased $122,000, or 34 per cent to $472,000.

The rest of Waikato and Bay of Plenty also recorded an increase in house prices.

Waikato Chamber of Commerce chief executive William Durning said while the report reflects what was happening in the region, it was not bad.

"The troubles, or challenges, that the dairy sector is facing, that will come right. They are a resilient bunch," Durning said.

"We have a dynamic economy with a lot of dynamic sectors, including logistics and education.

"I can't see us doing anything but succeeding in the future."

Southland, Taranaki and the West Coast were at the bottom of the scoreboard, weighed down by the dairy sector.

Taranaki's pain was tied to the oil sector and a quiet housing market.

Southland had declining retail sales and low confidence levels. 

Bay of Plenty topped the list, beating out Auckland and Canterbury, with first-place rankings across all key measures, including for construction, house prices and retail sales.

From stuff.co.nz