Investments within the reach of many

The double income family can more easily afford the second home and they are choosing to invest wisely in the leisure-orientated weekend retreats within a two-to three-hour drive from Auckland.

Bayleys real estate agent John Greenwood says holiday homes are now seen and used as a monetary investment, not just an investment for the next generation to use. "If you have $1 million tied up in shares, money etc, the return is between 5-8 per cent and once tax is paid the overall position can be less than you started." By contrast, coastal property has increased substantially in value over many years, consistently by 15 per cent with some areas returning more than 20 per cent.

"An investment in a coastal property one to two hours from Auckland can give you the best of both worlds - an ideal place for lifestyle living, while still working, plus an asset that will increase substantially in value.''

If it is being genuinely used as a family holiday home, and is not included in your business, then there is no capital gain tax applicable.

Greenwood says approximately one per cent of the population earns $300,000 to $500,000 a year, equating to between 30,000 and 40,000 people who can afford to buy a holiday home in the $750,000-$1 million market.

Coromandel
Harcourts agent Ian Kemp says the area surrounding Coromandel township on the Coromandel Peninsula has increased not only in value but also in the demand for properties. "There just isn't much land between the sea and the surrounding hills to cater for the demand, so rezoning to allow controlled development is of high priority."

Where once it was relatively easy to find a seaside property or a house close to the beach, they are now scarce and have increased substantially in value, Kemp says. " Five years ago $300,000 would have bought a property with a nice seaview; now that only just buys a property in the residential part of Coromandel township; consequently the residential property market in Coromandel has changed to include a `vacation' market. Many people who now cannot afford the seaside are taking that option. It is still only five minutes drive to launch the boat."

Building sites (no house) range from around $300,000 to $650,000 for a clifftop or seaview section. "The premium sites at the top end of the market fetch good money, but there aren't many of them. Most are cliff top or similar with outstanding seaviews."

The town centre has a District Plan `heritage' overlay to help preserve its colonial character. New buildings must be designed in keeping with the heritage style and colour scheme and the facade of old buildings preserved if possible.

In many places the traditional Kiwi bach has been replaced by designer houses with horizontal corrugated iron, bi-fold windows and doors and big decks. Some original bach properties are still there, just not many of them. "At places like Whangapoua beach, the older fibro-bach is still evident but new houses are springing up everywhere. Beachfront properties have likely risen in value there by $1 million in five years.''

At the 20-plus year-old Matarangi development, original two-bedroom Lockwood homes are being removed to make way for five-bedroom, two-storey designer houses to keep up with current trends. Increases in land value and its popularity are making this redevelopment worthwhile.

Mangawhai
Barfoot & Thompson agent Craig Matheson has watched Mangawhai change from a cute beachside location to a thriving village that is rapidly outgrowing itself.

"Mangawhai has a permanent population of about 2000 and it will double in two years. There are 800 new sections on the market now with a further 2000 projected for development over the next two to three years.

"Mangawhai is now almost too convenient to Auckland. The new section of motorway has cut about 20 minutes off the drive and the next section will cut the time down again." He says infrastructure for the town is being developed to suit the predicted growth.

House style has changed dramatically, with fibrolite and corrugated iron being replaced with architecturally designed low-maintenance houses.