Fox­ton Beach still top value for a bach

Kapiti Observer - - FRONT PAGE - SU­SAN ED­MUNDS

At the first sight of sun­shine, many peo­ple start think­ing about sum­mer hol­i­days at the beach.

But is it worth buy­ing your own slice of coastal prop­erty? If you’re look­ing to buy a slice of coastal prop­erty, then Fox­ton Beach could be the ticket.

New data from Homes.co.nz shows some coastal ar­eas are still rel­a­tively af­ford­able - with Fox­ton Beach among the best value.

But for many of the best value ar­eas, you’ll have to be will­ing to travel to get to them.

You could buy a prop­erty in Te Kop­uru, on North­land’s Poutu Penin­sula, for a me­dian $264,286. Opononi, also on North­land’s east coast, only has a me­dian of $269,190. Kai Iwi, near Wan­ganui, also has a me­dian of $175,553.

Homes.co.nz spokesman Jeremy O’Han­lon said Fox­ton was an af­ford­able, ac­ces­si­ble op­tion for those in the lower half of the North Is­land.

‘‘Within a cou­ple of hours, and for around $250,000, you can be re­lax­ing at the beach,’’ he said.

‘‘There are still rel­a­tively low­cost wa­ter­side towns com­pared to Auck­land and Welling­ton prices, but you need to be will­ing to travel a lit­tle more, or forgo a pris­tine sandy beach.’’

He said buy­ers who wanted any­thing closer to Auck­land or Welling­ton would need to be pre­pared to spend at least $800,000, or con­sider rent­ing.

In­fo­met­rics fore­caster Mieke Wel­vaert said the hol­i­day home mar­ket was chang­ing thanks to plat­forms such as Airbnb, which al­low peo­ple to rent prop­er­ties on a short-term ba­sis.

‘‘Pre­vi­ously, stay­ing at a bach of­ten in­volved own­ing it your­self or know­ing some­one that had a bach you could use. Airbnb cir­cum­vents th­ese op­tions for peo­ple want­ing to stay in a bach, but not own one,’’ she said.

‘‘As a re­sult, we could ex­pect to see re­duced own­er­ship de­mand from peo­ple only want­ing to stay in a place at a par­tic­u­lar time of the year. This will put down­ward pres­sure on bach prices.’’

But she said it also cre­ated an op­por­tu­nity for those who wanted a dif­fer­ent type of in­vest­ment.

‘‘On the other hand, the ex­is­tence of Airbnb means you have a greater po­ten­tial for fi­nan­cial re­turn if you own a bach. This po­ten­tial fi­nan­cial gain could be enough of an in­cen­tive for more peo­ple to want to own a bach. As a re­sult, the num­ber of bach buy­ers might in­stead in­crease, and thus drive up prices.’’

If you bought a hol­i­day home with a $500,000 mort­gage, you would need to be able to rent it for $130 a night for 300 nights of the year to cover your mort­gage pay­ments and Airbnb fees. That does not in­clude any main­te­nance or other up­keep costs.

Prop­erty tax ex­pert Mark Withers said he had sev­eral clients who had to con­sider reg­is­ter­ing for GST be­cause their in­come from a sin­gle bach had hit $60,000. He said mixed-use as­set rules, which came into ef­fect in the 2014 tax year, made it more im­por­tant that bach rentals were run se­ri­ously.

He said peo­ple who made the most money out of hol­i­day houses were those in places that had year-round tourist ap­peal and could be booked by lo­cals at

HOWTHEY RATE

Cheapest­wa­ter­side spots - Up­per North Is­land Te Kop­uru - $264,286; Kaeo - $267,528; Karikari Penin­sula - $269,190; Opononi - $269,895; Taipa - $309,664 Cheapest­wa­ter­side spots - Lower North Is­land and Up­per South Is­land Kai Iwi - $175,553; Fox­ton Beach - $251,265; Mataikona - $284,742; Waitarere Beach - $306,268; Otaki Beach - $311,302 Most ex­pen­sive­wa­ter­side spots - Up­per North Is­land Omaha - $1.275m; Langs Beach - $1.160m; Opito Bay - $1.075m; Whangapoua - $889,176; Mat­apouri - $875,789 Most ex­pen­sive­wa­ter­side spots - Lower North Is­land and Up­per South Is­land When­u­anui Bay - $1.041m; Kai­teri­teri - $869,058; Tor­rent Bay - $811,078; Whata­mango Bay - $735,064; Moetapu Bay - $714,420 week­ends, such as Wai­heke, Queen­stown or Ro­torua. ‘‘Some coun­cils are now im­pos­ing spe­cial rate levies on dwellings that are rented like this due to pres­sure from the com­mer­cial ac­com­mo­da­tion sec­tor as Airbnb im­pacts them.’’

Bindi Nor­well, chief ex­ec­u­tive of the Real Es­tate Institute, said buy­ers should con­sider whether they would be af­fected by loan-to­value rules which re­quire in­vestors to have at least a 40 per cent de­posit. It was also worth con­sid­er­ing how they would man­age any main­te­nance.

PHOTO: GRANT MATTHEW/STUFF

Fox­ton Beach: sun, surf and good prices for a get­away pad.

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