Some Auckland-based buyers see the modest prices in coastal areas representing a bargain. QV's House Price Index has recorded a 22 per cent increase on Auckland prices in the 12 months to September 2015 compared with 4.1 per cent for the holiday Mecca of Coromandel.
The big but is whether there will be significant capital gain in coastal property to make investment worthwhile financially.
Coastal values in many parts of New Zealand have still not recovered to the levels seen at the previous peak of 2007, says Andrea Rush, communications manager at QV. Nonetheless QV is beginning to see the discretionary spend return in terms of people looking to buy coastal property now, says Rush. In Coromandel, Harcourts agent Ian Kemp is seeing more and more Aucklanders considering using their increased equity to buy holiday properties.
Heraldhomes asked First National Whangamata principal Gordon Turner for an example of a meat and potatoes bach that had changed hands at least twice since the 2003/4 boom. Turner cites the property at 222b Aickin Rd, worth $245,000 in 2003, sold in 2009 for $270,000 and again in May 2015 for $355,000. He estimates it's now worth about $415,000.
However, QV's E-Valuer figures, which are extrapolated from recent sales, don't suggest that such an upturn is widespread in Whangamata. The town had an estimated property price increase of 0.6 per cent to the year June 30, 2015, and 6.4 per cent for two years to the same date.
It's people looking to buy a coastal section and build who are likely to find bargain basement prices -- especially in areas such as the Karikari Peninsula, which was overdeveloped in the last boom. Dickens notes that there are still asking prices as low as $45,000, and some sections are changing hands for as little as $30,000, he says.
"These are the sections that were sold in the vicinity of $200,000 when they were first [developed]," says Dickens. Many were bought by investors looking for capital gain but were left "licking their wounds" after the GFC slashed their section values.
Likewise, Kinloch near Taupo is still awash with sections for sale at what might be bargain prices if demand picks up.