Holiday hot spot Akaroa’s average house price cracks $1m
The simple Kiwi bach is scarce in the popular holiday spots. Buyers are paying plenty of money for attractive properties, as Liz McDonald reports in this first in a series on baches and holiday houses.
Hanmer Springs and Akaroa. With their natural beauty, relaxing vibe and closeness to Christchurch, they’re the hottest getaway spots for city residents.
But you won’t find many basic Kiwi baches in either town. They both offer large numbers of attractive holiday homes, and they’re in demand from buyers.
According to property analyst CoreLogic, the average value of a home in harbourside Akaroa has passed the million-dollar mark and is now $1.01 million. Offerings range from French colonial charmers to modern and double-glazed.
In Hanmer Springs, the average value is $797,000. New subdivisions in the Hurunui spa town feature rows of alpine-style chalets.
Akaroa real estate agent Chris Mangels says most holiday homes in his town are of good quality, and prices are going up. To find a simple bach, buyers would need to look further out, such as at the peninsula’s bays. The town has “huge demand” for rental holiday accommodation in summer, but less so in winter, he says. Both old and modern homes are popular for buyers and holiday renters if they look good, and “spectacular water views” sell well.
“If a house is beautifully presented, it will get more money, whether it’s old or new.”
Mangels says many Akaroa holiday homes have been in the same family for years, so are mortgage-free, and he has not seen any distressed sales due to higher mortgage rates. He says some people will buy a holiday home with plans to move into it permanently later in life. Another trend is owners from the city spending up to half their week in their holiday residence because they can work remotely from home.
Christchurch mortgage broker Tony Mounce says few buyers now get a holiday home just for their own use. This means kitting them out to be photogenic for the short-term rental market. Plenty of owners add fun extras like a barbecue, a spa pool, or kayaks in the garage.
“The bottom line is, more and more people buying a holiday home are subsidising the mortgage and rates with Airbnb or Bookabach, or similar.
“Let’s face it, a holiday home is a luxury. It can be a good idea if it suits your lifestyle and your pocket,” he says.
Mounce says while owning a holiday home is an attractive proposition, it makes a less stable investment than a standard residential rental, especially in a seasonal location. “Even if you try and make some money out of it, you have to start out with plenty of disposable income. Holiday home owners generally have a bit of fat in their budget.”
The most popular choices for Christchurch buyers are Hanmer Springs and Akaroa, or Wānaka and Queenstown for those prepared to travel further, he says.
Hanmer Springs agent Harley Manion says 80% of their sales are holiday homes. Most buyers are Cantabrians. Low maintenance and proximity to the town centre are the main criteria for most buyers, he says.
“If you can easily walk to the pools and the forest, it’s very saleable.”
Design rules introduced in the town 35 years ago mean all homes must be built of natural materials with steep roofs, maintaining the alpine village feel.
“Hanmer is still very affordable. You get more bang for your buck in Hanmer, and it’s a 365-day destination,” Manion says.
Occupancy rates for renting to holidaymakers are 50% to 55%, he says, with most owners putting their homes into the rental pool. “Although there are a few who don’t – they just want a private holiday house.”
Mounce says the advantages of owning a holiday home include the convenience of having your own fully-equipped place, being able to share it with family and friends, and potential capital gain.
Disadvantages include always holidaying in the same place, needing to make it available at peak earning times, paying agent or listing fees, and maintenance and restocking requirements.
Mounce says lenders will look at a buyer’s own income, not holiday rental income, when considering mortgage approvals.
He cautions anyone considering buying a holiday house to seek advice from their accountant, lawyer, bank or mortgage advisor, especially if they intend to rent it out. “It gets quite complex, with GST, body corps, insurance, and resource consents needed in some places. There are new rules. Make sure you talk to someone who knows that stuff.”