Bargain bonanza in coastal holiday towns

New Zealand’s coastal holiday towns are dishing up real bargains for investors, despite being among the hardest hit by the recession.

Monday, December 22nd 2008, 6:00AM

by The Landlord

Peter Lawrence of Richardsons Real Estate in Whitianga says because holiday homes are a discretionary spend, places like Whitianga in the Coromandel Peninsula are among the first to feel the pinch when the pressure is on. Adding to the woes, large numbers of tradespeople, lured by big building developments, have now retreated back to more populated areas to find work.

As a consequence, there’s been a huge drop in volume of land and residential sales, he says. Prices for houses have come back by about 20%. “You can now buy a nice, three-bedroom home in Whitianga for around $230,000. We’ve had more mortgagee sales than ever. A swag of apartments are for sale for under $200,000,” says Lawrence.

The upshot is “it’s a fantastic buyer’s market. There’s some serious pain. The first buyers to jump in will pick up some serious bargains,” says Lawrence.

Jan Madden of Jan Madden Century 21 in Paihia says the same is happening in Paihia and Russell.

But the slack is being taken up by dairy farmers, who are buying up coastal land as a “bank” for their excess cash.

“People don’t have to move here for jobs or schools. They choose to live here. We have been hit hard and there are a number of mortgagee sales. Sales are down in both volume and price. There are bargains to be had. Our bread and butter lines between $400,000 and $1 million have slowed considerably. But there are definitely more cow-cockies buying up land around here.”

Julie Misheski of Havelock Real Estate in the Marlborough Sounds says activity is the quietest it’s been in many years and she believes coastal holiday towns are worse off than many areas. She hasn’t seen any mortgagee sales. But sellers are very negotiable on price.

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