First National sees land, housing shortage in coastal areas

for public release

31 January 2017

First National sees land, housing shortage in coastal areas

First National Real Estate Chief Executive, Bob Brereton, says strong sales of holiday homes around New Zealand may mark the beginning of renewed interest in coastal investment property as investors continue to look outside Auckland for opportunities.

Mr Brereton says that First National Offices, around the country, are reporting a significant increase in activity and interest in holiday homes and he attributes this to investor behavior and a return to confidence in coastal investment property.

“Between 2003 and 2007 coastal property and holiday homes saw a strong rise in values – but they fell out of favour after the Global Financial crisis and haven’t really featured as an investment option in more recent years. But it looks like that might be changing”.

Mr Brereton says that the Groups offices in Whangamata, Tauranga, Mount Maunganui, Waihi, Riverton and Wanaka are all experiencing very strong sales interest and notes that securing listings is an ongoing problem.

“In most of those locations we simply can’t get enough stock to meet the strong growing demand – which means prices are being pushed up and vendors are finding themselves in the box seat. Whangamata and Waihi have seen big price increases – and prices in Wanaka have increased by around 50% over the past 18 months”.

Mr Brereton says that another strong indicator of investor opportunity is a lack of available rental stock – and he notes that this has become very tight in coastal locations.

“In some areas, our offices are reporting that it’s virtually impossible to find a long-term rental – and even short term holiday-stay rentals are tricky to find. This means that there is no shortage of potential tenants in these locations – something that may have previously concerned would-be investors”.

Mr Brereton says that he doesn’t see the tight rental market correcting itself anytime soon and notes that vacant sections are in very high demand in most coastal areas.

“Our Whangamata office has seen the number of available developable sections drop by more than 90% over the past 12 months – and at Waihi Beach, vacant sections are in such high demand that they’re being sold up to 36 months before title is formally issued”.

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