Price growth shows Kiwis hanker after summer place
If a trip to the beach leaves you hankering for a holiday home of your own this summer, good news: You could buy one for as little as $110 a week. But here’s the bad news: It might take you a while to drive there.
New data from homes.co.nz has revealed the median price of houses in holiday hotspots around the country, and what an interestonly mortgage would cost to service for buyers with a 20 per cent deposit and an interest rate of 4 per cent.
It shows the cheapest holiday homes, unsurprisingly, tend to be in more remote areas.
Mangakino came in top of the affordability table. It is a lakeside spot about 100km south of Hamilton. If you want a summer of bush walking, hiking, fishing, boating and bike riding there, you will pay a median sales price of $178,000. That mortgage would cost $110 a week to service.
Homes.co.nz data is collected from council sales records.
The next-cheapest baches are on Stewart Island, with a median homes.co.nz estimate of $235,000 and a mortgage of $140 a week.
Foxton Beach was third at $304,000, then Ahipara at $308,000 and Gisborne at $323,000.
At the other end of the scale, Arrowtown is the most expensive holiday spot in which to buy a house. The median price of $1.12 million would leave you with a $690-a-week mortgage. Close behind is Wanaka at a median $1.07m. Waihi Beach was a distant third at $755,000.
Could you Airbnb it?
An increasing number of holiday home owners are opening their properties to tenants as short-term rentals to help cover their costs.
The homes.co.nz data also looked at how many nights you would need to rent a place to make it pay for itself, based on indicative nightly rents from Airbnb.
In three parts of the country, you could rent out your property for a month or less and cover the cost of the 80 per cent mortgage for a whole year.
In Paihia, with a median homes.co.nz estimate of $464,000 and an estimated rental per night of $500, it would take 30 nights to cover a year’s worth of the $290-a-week mortgage.
In Gisborne you’d have covered your costs in the same amount of time, but on Stewart Island you would only need 25 nights and, in Mangakino, 28.
Chief data scientist Tom Lintern said that made finding permanent tenants less appealing in those areas and could contribute to less rental stock being available.
Getting a mortgage
The other reason that number matters is the bank.
Under the loan-to-value restrictions, banks have to treat you as an investor, and require a deposit of 30 per cent, if you rent out a property for 42 nights of the year or more. Five regions came in under that threshhold.
If you need the rental income to afford the house at all, that could also push you into investor territory in the bank’s eyes.
Broker Glen McLeod said it was more difficult to get a loan for a bach than it used to be, but not impossible.
‘‘We have had large numbers of clients who’ve applied direct and been told ‘no’ come to us and we’ve turned it around and are doing them.’’
He said it was often a case of how the deal was presented to the lender.
Capital gains
The cheapest holiday home hotspots are also experiencing some of the strongest price growth.
Mangakino values are up 16.2 per cent year-on-year.
The fastest bach price rises in the past year have been in Raglan, where values are up 17.1 per cent. That’s followed by Twizel at
16.8 per cent.
‘‘We are seeing annual price growth of more than 15 per cent in many holiday hotspots, indicating that Kiwis are still searching for their dream bach,’’ Lintern said.
Bindi Norwell, chief executive of the Real Estate Institute, said she expected strong demand for holiday houses this summer.
‘‘As we’ve seen for some years now, prices in holiday hotspots continue to increase in value,’’ she said.
‘‘Real estate agents in coastal towns are bracing themselves for a plethora of inquiries over the Christmas/New Year period.
‘‘Our figures demonstrate signs of a buoyant market in some of the top holiday destinations across the length and breadth of New Zealand.’’
Across the country Homes.co.nz reports Auckland values down 1.2 per cent, Wellington’s up 8.5 per cent and Christchurch’s down
0.5 per cent. Dunedin is still the standout of the main centres, up 11.8 per cent.
Auckland’s first-home buyer price, which assumes that firsttime buyers purchase a property cheaper than 75 per cent of those on the market, was down 0.2 per cent.