First National Real Estate is reporting that its offices around the country are seeing significantly renewed interest in, and activity around, coastal holiday homes.
The agency’s chief executive, Bob Brereton, said this could be attributed to investor behaviour and a return to confidence in coastal investment property.
Between 2003 and 2007 coastal property and holiday homes saw a strong rise in values but they fell out of favour after the Global Financial crisis, he said.
“They haven’t really featured as an investment option in more recent years. But it looks like that might be changing.”
In traditional holiday hotspots like Whangamata, Tauranga, Mount Maunganui, Waihi, Riverton and Wanaka, the agency’s offices report very strong sales interest and problems securing listings.
Brereton said that in those locations they can’t get enough stock to meet the strong growing demand, which is leading to price increases.
Whangamata and Waihi have seen big price increases of late, while prices in Wanaka have increased by around 50% over the past 18 months.
A lack of available rental stock is considered to be a strong indicator of investor opportunity – and Brereton said rental stock has become very tight in coastal locations.
“In some areas, our offices are reporting that it’s virtually impossible to find a long-term rental and even short term holiday-stay rentals are tricky to find.
“This means that there is no shortage of potential tenants in these locations, which is something that may have previously concerned would-be investors.”
He said the tight rental market is unlikely to correct itself anytime soon.
On top of this, vacant, developable sections are in particularly high demand in most coastal areas, Brereton added.
However, investors should always think twice before rushing to buy a holiday home or section as an investment property.
As landlords.co.nz has reported before, investors need to be careful when investing in holiday hotspots – or smaller regional markets in general.
According to the experts, investors have to make sure they do solid research into an area and make sure their choice is based on solid population growth and demand.
Read more:
Investing in holiday dreams.
Watch out with regional bargains.
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