Tide out for beach house sales

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Big money is being lost by people who have speculated with real estate at one of Auckland's top beach spots.

The dream of making money at Piha has been shattered with a glut of property and plummeting prices.

Retired tomato grower and surfboard builder Peter Byer spent $2 million and 11 years subdividing his land into nine 4000sq m sections on Seaview Rd. They have been on the market for three years, and only one has sold, recently for $435,000, just over half its initial valuation three years ago.

"People have to drop their prices to sell their places," he said.

Bankrupt Auckland developer Peter Lockie recently lost more than $500,000 on another Seaview Rd property.

Lockie was a director of a company that developed a central Auckland apartment building which Blue Chip investors lost money on.

He bought the three bedroom Piha house on 8000sq m 18 months ago for $1.5m, but it settled this week by mortgagee auction for less than $1m.

Real Estate Institute figures for Piha show the average house sale price at the West Coast beach dropped to $511,000 this year, compared with almost $900,000 in 2008/09.

Piha Real Estate had 21 properties for sale this week, out of about 60 properties for sale in the area.

Co-owner Jim Trubuhovich said the number of properties for sale was "really high".

People were feeling the pinch and deciding to sell their Piha holiday homes.

But Trubuhovich said vendors were unrealistic and wanted too much for their properties, forgetting last year very little property sold because of the recession.

"It's certainly looking more promising than 12 months ago. There have been a number of sales this year but most are in the lower price bracket of between $400,000 and $600,000," he said.

In the last two years only three blocks of land in Piha had sold.

Piha Property Brokers' director Phil Parks has 45 listings. Only 12 properties sold last year, compared with 35 in 2007/08.

"We have seen a reduction in prices and a lot of vendors are not willing to take that on board and are prepared to wait. I don't think it will ever recover to the level they want," Parks said.

Properties were usually on the market for about 18 months before vendors dropped prices.

Overseas investors were still interested in buying prime coastal real estate.

This week, Parks sold a 5ha section for $1m to a couple from Switzerland.

"People are absolutely petrified of the consent and council process, the price of bare land, a six to eight months waiting for consent and incredible bureaucracy," he said.