All that glitters is golden when it comes to seaside real estate

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All that glitters is golden when it comes to seaside real estate

Tags: Property Insight Research Residential

Coastal property prices in holiday townships across the upper North Island are now firmly a two-tier proposition, according to new research.


Data from real estate agency Bayleys reveals that those seeking out the golden sands of east coast beaches will be paying around double the price for their slice of paradise compared with a similarly sized piece of black sand terrain on the west coast.

Bayleys Research manager Ian Little said the east coast/west coast price differential was caused by the combination of both environmental and social factors.

“Stereotypically, west coast beaches are generally more exposed to the elements, and are more rugged. So the surf tends to be a bit bigger and the prevailing winds a bit stronger,” Mr Little said.

“In comparison, the topography of the east coast offers more shelter to beach-goers, with gentler waves and moderate wind patterns. “Anecdotal feedback from those surveyed indicates these are direct factors in considering where to buy waterfront and coastal holiday homes.

“The exceptions to this on the west coast would be Raglan and Opononi/Omapere – which both offer sheltered swimming opportunities in addition to the bigger surf breaks. While values have not increased, sales volumes have, indicating there are buyers out there seeking ‘rustic rural’ locations to get away from the proverbial crowds.”

Mr Little said social amenities such as shops, cafes, internet access, sports and recreation clubs also influenced coastal property values. “Data shows the better the range of recreational and social services, the higher the property values,” he said.

“However, it’s very much a ‘chicken and egg’ scenario – what came first, the holiday homes or the services? Analysing the consent and building approvals of both property classes indicates they generally grow in parallel – so the more homes built in a seaside location, such as Mangawhai for example, the more selection seen in retail outlets, bars, and cafes.

“Commercial expansion is less evident in locations where there has been minimal residential growth over the past decade – such as Port Waikato just south of the city, and Ahipara in the Far North.”

It is clear that in the case of a majority of buyers, travelling distances rank highly as an important factor in their seaside buying decisions.

The levels of purchaser inquiry reduce as travel times increase with a relatively small proportion of buyers wanting to travel for more than three hours.

“That three hour band allows holiday home owners to leave their workplace mid-afternoon on a Friday and be at their beach house by dinner time. And conversely, leave early on Monday morning and head straight into work,” Mr Little said.

“In normal traffic conditions, that three hour  bracket allows the likes of Langs Beach, Waipu  and Mangawhai to be reached in the north, and  the Coromandel and Raglan to be accessed in  the south. 

“Commuter congestion on the city’s  metropolitan motorway network – particularly on  the Friday afternoon leading into long weekends  was cited as the reason for cutting down  travelling times to the beachside destination.” 

However, Mr Little said the discrepancy in  black sand/gold sand location values did offer  up opportunities, provided buyers were realistic  about achieving their holiday home dreams. 

“It’s about compromise. You may not be  able to afford a waterfront mansion in Pauanui  for two or three million dollars but you can  afford a cute bach on Kawhia Harbour for a  fraction of that. Likewise with Mangawhai in the  north compared to a dwelling on the Kaipara  Harbour,” he said. 

Mr Little said sales data provided by the  Real Estate Institute of New Zealand highlighted  the primary motivation for buying coastal real  estate was for recreational enjoyment ahead of  capital growth or rental yields. 

In the five years from 2010, land values rose  in virtually all of the coastal holiday locations  analysed by Bayleys Research:

By comparison, median prices for homes in greater Auckland rose by a whopping 67.9 percent over the 2010-2015 period.

“Kiwis have been buying beach homes for generations – it’s part of our cultural psyche. As a country, and particularly in the upper North Island, the call of the sea and sand over summer is extremely strong – with romantic images of family summers at the beach,” Mr Little said.

“What has changed is the ease with which many seaside destinations can be reached – such as the 2011 opening of the Kopu Bridge into Thames which substantially eased traffic congestion to the likes of Pauanui, Cook’s Beach and Tairua, and construction of the Puhoi tunnel and the Northern Toll Route which cut the travelling time to Mangawhai by some 10 –15 percent.

“The opening up of those routes caused a domino effect on real estate values. Greater ease of access equated to more traffic, which equated to more demand for property, which in turn pushed up values.”

 

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