The value of homes on a stretch of eroding Haumoana coastline have likely increased by 40 per cent overnight after a council seawall got the green light, a property expert says.
Hastings and Hawke's Bay Regional Council this week granted consents for the 100m wall, which will be built from large limestone rocks and constructed to protect Cape View Corner at the intersection of East, Beach and Clifton Roads from erosion.
It will be similar to the revetment wall at Clifton Beach and will be funded by $600,000 from Hastings District Council's annual plan. A long-abandoned bach on the corner will be removed to make way for the wall.
Ray White managing director Elanor MacDonald said it was a "very positive move" for long-threatened homes in the area, as well as Hawke's Bay as a region.
Homes on the Clifton Rd stretch have long been among the cheapest coastal property available in the region, and NZ in general, because of how often they are inundated by storm surge.
Back in May 2019, No 21, a threatened house, made headlines when it sold for an astonishingly cheap $75,000.
"The houses most at risk which haven't been damaged by erosion, and with uncertain futures, could see an increase of about 40 per cent in prices, as they are in the best spots," MacDonald said.
"I would imagine the increase in prices for the houses further back would be in the realm of upwards of 10 per cent.
"We have seen no drop-off in demand. The market on the whole will continue to rise."
MacDonald said the wall could also mean council could address the shortage of affordable housing in the region.
"On top of the already rising markets we need probably 800 to 1000 houses to house people in emergency accommodation.
"It would be great if they [council] could open few sections of land and rezone properties.
"Previously the council would not have considered future development, but there is quite a lot of land in the area, [with the wall] there's no reason why the council or a private investor won't be able to build. It's good news for Hawke's Bay."
MacDonald said the wall would also herald a positive impact on house insurance.
"Insurance companies will have a more favourable approach to houses along the tsunami line in Haumoana and along Te Awanga," she said.
"There are quite a few high-risk properties with no insurance or really high insurance.
"Some houses fall into the category of 'not damaged' but will be damaged by erosion if the wall is not built. Insurance will be more favourable for those houses with the consent approval for the wall."
Insurance Council of NZ Chief Executive Tim Grafton said it was not clear how much protection such a wall would offer to insured properties located along the coast at Haumoana.
"The local council reports it is intended to protect roads and infrastructure to maintain access to the Cape," Grafton said.
"Each insurer will make its own decisions about its appetite to accept risks in the area and how they will price that risk.
"The approach will also vary between companies as some will look at the particular risks to that property which may be quite different to another home in the Haumoana community. Some companies, though, may take a more community-wide approach to its decisions.
"It remains to be seen whether the wall will have any material impact on those decisions."
Construction is expected to begin on May 10 and the laying of a solid foundation for the rocks will take eight weeks.
A cycleway, parking developments and landscape planting will be undertaken when the wall is finished.