KEY POINTS:
The economic downturn is taking its toll on a swag of luxury housing estates pitched at once-rich buyers.
Projects spread across lakefronts from Taupo to Queenstown are feeling the pinch as financiers go on the front foot and demand their money back.
Without a swift sales trade in
the once-thriving and glamorous waterfront residential estate business, developers are being squeezed.
Mortgagee sales have already been called at two multimillion-dollar property developments in the past nine months, and more could follow, although John Darby, who is developing New Zealand's largest project - Jacks Point at Queenstown - says the southern area will always pull buyers.
In September, Westpac pulled the plug on a big property project part-financed by the now-failed Bridgecorp, forcing a mortgagee sale of the Lochburn upmarket residential subdivision at Glenorchy, about 40 minutes from Queenstown.
On Wednesday, Simpson Grierson solicitor Neville Tuck said 16 sections up for mortgagee sale at Lochburn had all been sold to various buyers, but he could not comment on whether Westpac got full repayment of its loan.
This month, Hanover found itself in the rough at the Kinloch luxury golfing estate near Taupo, with millions of dollars loaned but an extremely slow sales process.
Buyers have until Tuesday to make up their minds, although one institutional investor said he wouldn't even part with $10 million for Kinloch, which the market had shunned. Colliers International refused to supply Kinloch due diligence documents to the Weekend Herald, saying it would feed information only to genuine buyers.
Tui Farm Park, developing the Tui Creek rural Canterbury subdivision, is in receivership. Christchurch accountant Murray Allot said a lack of sales resulted in the development defaulting on its debenture.
Roger Richwhite, of Remuera, who is David Richwhite's brother, was its sole director.
Richard Parsonson, involved with the project, said three properties had already sold but the remaining 13were up for tender, closing June 30.
Sales at the seaside Matarangi Beach Estates in Coromandel have also been slow, according to one worried Aucklander with a bach there who reported a brisk 12 deals last April by one active agency. But he said this had slowed, without a single deal last month by that same agency.
Hanover wants $5000 deposits on Matarangi sections, settling in 2010.
The unsold portion of Bendemeer, a $140 million project at Lake Hayes, is understood to be under offer. Christchurch developer Richmond Paynter, of Paynter Developments, could be selling his stake in that project, which has not been actively marketed since October. An initial offer fell through but a second offer is expected to stick.
Chris Herbert, who has taken sales inquiries on Bendemeer's proportional ownership deal, said the southern lakes area was busy with real estate for sale.
"There's been a lot of property on the market here," he said.
One bank credit-controller is worried about the area and the flood of luxury housing projects on the market. "Personally I think they're struggling big time, all of them. The future is grim," he said.
Another institutional investor described the market for glamorous new properties on the lakeside or seafront as "toast".
But Mr Darby said this month that while the property market nationally has slowed, Queenstown was poised for continued growth because all indicators suggested demand for permanent residences and holiday homes would remain high.
"The lifestyle offered in Queenstown and the sheer beauty of the area means it is a place that people are always going to want to be a part of," Mr Darby said.