Mount Maunganui coastal properties rising in value despite climate change threat

Beachfront property values in Mount Maunganui have surged almost 60 per cent in the last four years, new data shows.

OneRoof and Valocity's latest research showed coastal properties in the Mount were still rising in value despite a slowdown in sales since 2015 and the rising threat of climate change.

However, local real estate agents said most buyers were not worried about climate risks and were still keen on buying beachfront properties.

The research examined property market values in 11 top North Island coastal locations, including Mount Maunganui, Whakatāne and Waihī.

It showed only 436 homes were sold in the Mount last year compared to its peak of 960 in 2015. But despite the slowdown, median values in the area topped the table at $735,000 - up 58 per cent in the last four years.

OneRoof reporter Catherine Smith said the rise in property values in the Mount was partly due to more new builds, as well as flats and apartments making up a high proportion of properties.

Research showed the median floor size in the Mount was now 158sq m, up from 140sq m in 2013, in a town where nearly one-third of the 9600 residences were flats or apartments.

Valocity's director of valuation innovation James Wilson said areas with more flats and apartments generally had a higher number of permanent residents, with demand fuelled by retirees and new market entrants.

OneRoof's data showed 62 per cent of Mount Maunganui properties still had a mortgage - 38 per cent were mortgage free.

In Oceanview Rd and Marine Parade, properties were still moving at points around $2.8 million to more than $4 million.

In Tauranga, more than 1200 homes were less than 1.5m above the spring tide mark, making them susceptible to rising seas, according to a 2015 Ministry for the Environment study.

Most of Tauranga's low-lying homes were in Mount Maunganui, Ōtūmoetai and Mātua.

Research found the Western Bay of Plenty region needed to prepare for sea level rise of 1m in the next 100 years.

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The Western Bay of Plenty District Council adopted a policy in August 2017 that provided a framework on how to respond to erosion and subsidence of council-owned coastal land.

However, local real estate agents said warnings of risk exposure was not reflected in buyer behaviour.

General manager of Tremains Bay of Plenty and Waikato, Anton Jones, said most people had been used to changing beach environments for many years and buying beachfront was still "very appealing".

"There is significant interest with people coming from Auckland wanting a holiday home or bach and local people with a strong desire to live on the waterfront," he said.

Simon Anderson, chief executive of Realty Group, which operates Eves and Bayleys, said there was limited beachfront properties on the market and a continued desire for people to live by the beach.

Bayleys Mount Maunganui agent Kay Ganley said most people did not think climate change would happen in their time and beachfront properties were still sought after.

"That demand drives values up," he said.

Bruce Crosby has lived on the beachfront in Pāpāmoa for about 27 years.

Crosby bought a bach about 5km from the Papamoa Beach Resort, which he owns, saying he needed somewhere to relax away from work.

He bought the two-bedroom bach for $186,000 and later built a larger home on the same section. "It has been our family home for the last 20-odd years."

Previous cyclones and extreme weather had eroded some of the beach in front of the Pāpāmoa holiday park in the past, but that did not happen often, Crosby said.

The sand dunes were a huge help, he said.

Crosby said building slightly back from the coast was a good idea but he was not worried about the threat of rising sea levels. "If I want to build on the beachfront, that's on me."

There was a big attraction to living on the beachfront, Crosby said. "There are not many places in the world you can do this. You take it for granted sometimes."