Foxton Beach still top value for a bach
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.