Summer bach rush
If the hot weather has got you dreaming of owning a bach by the sea don't mess around - this summer is probably your best chance to buy.
The average holiday bach on Coromandel Peninsula and in Raglan does not get much more affordable than now thanks to the economic downturn, valuation downgrades, and plentiful supply - but it won't last long, according to the real estate industry.
Agents say that, for the first time in several years, there has been a significant lift in buyer interest in these holiday meccas - particularly since August and noticeably by those aged 35 to 45 with young children - and sales are starting to eat into supply.
"There is plenty of stock available still but this is the summer to do it," Richardsons' managing director Neil Christie said. "Once the stock goes, people have to move up into another price bracket."
Like other sales agents, Christie does not expect bach prices to increase of themselves but stresses that the No 1 rule in the housing market is supply and demand. The facts suggest this is not all agent hype.
Real Estate Institute chief executive Helen O'Sullivan said that in the year to October, 42 Coromandel properties sold compared with 35 in 2012. The median price was $368,500, compared with $340,000 in 2012.
Raglan is also on the rise, with 102 properties selling in the year to last month, compared with 90 last year. The median sale price this year is $361,000 - last year it was $320,000, she said.
PropertyIQ research analyst Nick Goodall said values were consistently down across the Coromandel area. Median sale prices were generally well below the average value of suburbs in the Coromandel region and Taupo, indicating sales were happening at the lower end of the market.
Raglan had experienced a 4.3 per cent lift in value in the past year but sales in the three months to the end of September were down on the same period last year.
For real estate agents in holiday spots, the pickings have been lean until this year, as the market deflated along with confidence in the wake of the 2008 global financial crisis. But this year business has graduated to "steady", they say. And with the sea-change has come new trends.
Bayleys Whitianga managing director Mary Walker has noticed potential buyers have done their financial homework compared with the pre-2008 boom real estate years.
"We've been chugging away [this year]; the last two years have been really tough. Prices haven't risen - they've been levelling out or coming back. I don't think prices will rise for some time.
"But there's more inquiry and it's genuine. People are buying now to maybe retire here."
Richardsons' Christie and his colleague Richardsons Cooks Beach branch manager Phil Dawson have noticed more young parents in the market this year.
Dawson said a Cooks Beach subdivision from the 1990s had pretty much sold out, with a few resales available.
"No-one is buying for speculation, which gives people an opportunity to buy a section for a caravan or a tent. Stock is clearing, there's a reasonably large inventory . . . but we're quickly getting to the middle of it." Depending on location, $350,000 to $450,000 would buy a three-bedroom modern house with an ensuite.
Raglan had experienced an increase in inquiries in the lower price range in the past three months, said Terry Podmore, group manager of L J Hooker. He has noticed most inquiries are backed by pre-arranged finance. He has also noticed an increase in interest from buyers aged 35 to 45 years.
At Waihi Beach, $300,000 would buy a "very basic" bach and $400,000 to $500,000 an average bach, Harcourts manager Merv Gardiner said.
Owner of Whangamata's First National Gordon Turner said his company had the best winter sales this year in nearly a decade. But he said that since the Reserve Bank's loan value ratio limits were introduced, the market had lost its spirit as general confidence deflated.
- © Fairfax NZ News