Waterfront property values on the Coromandel Peninsula have stabilised this year, after falling 10 per cent during the recession of 2008/09.
In other beach areas surveyed by Bayleys Research, values fell 14 per cent on Waiheke Island, and 22 per cent in the Rodney District where waterfront property was the most
highly priced.
The real estate firm's Absolute Waterfront Value Index has tracked movements for the past 28 years in the three popular coastal destinations.
Sales and valuation information showed that land value in the three markets increased three-fold in the 10 years ending 2007 to 2008.
Sarah Davidson, Bayleys Research analyst, said the limited number of properties right on the beach - they are tightly held, often passing from one generation of family owners to the next - has meant their drop in prices has been less pronounced.
The last 12 months have shown a turnaround in value movements - the downward correction slowed on the Coromandel Peninsula, and reversed in Rodney and on Waiheke Island, she said.
"Values on the Coromandel have held relatively steady, Rodney's values recovered 15 percentage points of their lost ground, and Waiheke values are back up nine percentage points."
Spread over nearly 30 years, absolute waterfront property - which has an uninterrupted view to the sea - had an annual average capital growth of 13.6 per cent on Waiheke, 15.7 per cent on the Coromandel and 17.3 per cent in Rodney.
"Taking into account inflation, real compound returns have been between 9.2 to 12.9 per cent a year, putting waterfront property returns ahead of many other investments even before considering the lifestyle benefits."
