Reality Check: Buying a section

The third stage of sections at The Anchorage subdivision at Mangawhai are about to be released, starting at $145,000.

A plot of land, close to the beach. Walking distance anyway. Or at least with a view. You don't have to build straight away. Something simple maybe, with something bigger later. Maybe build somewhere to retire to. Or not.

Yes, the section out of town is the grist for wishful thinking for large numbers of New Zealanders, and a lot of us get to act on it.

According to ASB Bank research head Rodney Dickens, there are about 5500 coastal and lifestyle sections on the market on Northland's east coast, starting at Mangawhai.

In fact Mangawhai is where a lot of the action is - 1375 sections have gained title or should do so in the next year, and a further 600-plus sections are in the planning stage, including a new commercial/ industrial area.

The other big development is One Tree Point at Marsden Cove just south of Whangarei, where almost 2000 sections will be available.

Dickens warns the increase in supply will eventually swamp end user demand, and speculators wanting to make a tidy profit flicking on new sections could get caught out.

That doesn't stop people dreaming of their weekend or summer getaway, and Craig Matheson of Barfoot & Thompson says most of the sections he is selling at The Anchorage in Mangawhai have been to Aucklanders looking for time out. "A lot of clients previously had places on the Coromandel, but got tired of the travel," Matheson says.

"We're an hour 30 north the bridge, and when the Orewa-Puhoi motorway is finished that time will come down even more."

The first and second stages of The Anchorage sold for $99,000 to $125,000. The third stage starts at $145,000. The subdivision is on a long flat property alongside the estuary and next to the school, sports domain and tennis courts.

A wetland has been turned into a feature, with lakes, islands and native plantings.

Mangawhai's sewerage scheme is still on the drawing board, so like most rural sections a septic tank is required. Developer Mark Rowbottom has gone for an eco-friendly solution where pairs of houses share tanks, with the cleaned water discharged onto raised bunds built on the offsets on the sections' boundaries. Native plantings on the bunds will eventually give the subdivision a verdant air.

There is power and phone to the boundaries, and a tank water supply will be needed. There are what Matheson calls "soft" covenants, mainly preventing relocation of old houses - a not uncommon proscription on east coast subdivisions.

Matheson says most people spend from $100,000 to $200,000 on a section, then a similar amount building.

"They probably have a house in Auckland with a mortgage, work, kids, school, friends and family - the last thing they want is a $500,000 mortgage at the beach."

The median section price in Otamatea, which includes the Mangawhai area, is $160,000, compared with about $150,000 in Whangarei country areas and $115,000 in Mangonui.

Power, phone, water and sewerage are all important features to look at when buying raw sections, along with prevailing winds, flood patterns, soil stability, what is planned for neighbouring land, not to mention the availability of builders and tradespeople.

Michael Williams, head of Barfoot & Thompson's rural and lifestyle division, says much of the necessary information will be held by local councils, although many buyers will also get a report from an engineer or property consultant for additional peace of mind.

Councils are increasingly loading many of the compliance factors into the resource consent process, so buyers will be hit with the costs of water or sewerage connection as part of the resource consents rather than getting an unwelcome bill later.

"The thing you have to watch out for is if a farmer had an existing title and hacked off a section. You have to make sure there are no surprises with services and amenities," Williams says.

Rising petrol costs should also factored in. Dickens noted a low level of building activity in the Mangonui area, despite a large number of sections sold, while nearer to Auckland in the Mangawhai to Waipu corridor the hammers are swinging.