Kath Duncan has never seen Ōmaha like this.
“There are for sale signs up in almost every street,” she says.
“I’ve been coming to Ōmaha for years and years and I’ve never seen so many houses up for sale.”
Duncan has owned baches in the popular beach town, 75km north of Auckland, for most of the past 30 years.
She bought her first Ōmaha bach in the 1990s, and then - after selling it when her children became older - started looking for another in about 2015.
However, it took three years of determined searching and being on a wait list before she managed to buy again in 2018.
“At any one time, there were only two, maybe three, properties [available],” she said of the search. Ōmaha homeowners prize their properties and rarely sell, given the town is on a tiny spit of land where new housing developments are difficult.
“The attitude has always been, if you’re lucky enough to get in on a property, you hang on to it if you can.”
That’s what made the recent string of “for sale” signs so surprising, Duncan said.
She wonders whether rising interest rates are starting to bite, especially among those who bought in recent years after the Covid pandemic.
That includes people who might have had extra money they weren’t spending on travel during the lockdowns and who took advantage of record-low interest rates to get loans to pay extremely high prices on homes skyrocketing in value over 2020 and 2021.
More baches on sale
House prices have been falling for more than 12 months and data by analysts at CoreLogic shows just how much the Coromandel – as one example of holiday hotspots – has been hit.
The median house value in Whangamatā is now $1.3 million – or 4 per cent less than three months ago and 13 per cent down on this time last year.
There are also fewer sales at the same time as more homes are being listed and are taking longer to sell.
CoreLogic’s data shows 109 homes were sold in Whangamatā in the 12 months to March this year, or half as many as the 218 sold in the 12 months to September 2021, which was close to the peak of the post-Covid booming market.
There are also about six times more homes listed for sale now than 18 months ago in September 2021 (61 compared to 12), with these homes taking on average 39 days to sell or about twice as long.
In nearby Pāuanui, it’s similar.
Prices are now at $1.46m – or 6.4 per cent lower than three months ago and 13.3 per cent down on a year ago.
Sales have fallen by almost three quarters with 44 made in the 12 months to March this year compared to 136 in the 12 months up to September 2021.
Listings are also more than double while homes are taking almost twice as long to sell.
The boom before the fall
The recent downturn comes after an incredible boom in bach sales around New Zealand.
Property website OneRoof and analysts Valocity analysed the country’s bach market in December last year and found Kiwis spent a colossal $14 billion on coastal property in the two years between September 2020 and September 2022.
The analysis found that, in the month after the start of the Covid crisis in 2020, there were just 76 sales made across 251 coastal locations.
However, sales in these locations exploded soon after the lifting of lockdown restrictions, with the monthly average for the second half of 2020 rising to more than 760 sales.
More than half of these purchases were second homes.
Having limited new land available for development, Ōmaha wasn’t among the coastal areas with the biggest volume of sales, but it was among the most expensive.
Ōmaha prices jumped by $761,000 to $2.7m over the two-year period between 2020 to 2022, the third biggest jump from among the 251 coastal locations analysed – behind just Waiheke Island and the Tāwharanui Peninsula.
Business as usual?
Long-time Ōmaha agent Di Balich, from Precision Real Estate, has also noticed more homes coming up for sale in the town, but she says she isn’t aware of people being forced to sell because they can’t afford to pay their home loans.
OneRoof currently has 21 homes listed for sale in Ōmaha.
Balich said there were typically about 28-30 homes for sale at any one time before the Covid pandemic, so she sees the current rise in listings as a return to “business as normal”.
She said the pandemic brought a big influx of people either buying in Ōmaha or spending more time in their baches as they sought to get out of Auckland and its lockdowns, and as remote working became more common.
Now, however, as people’s lives were changing again post-Covid, they were starting to sell, especially those who might have been holding on to houses throughout 2022 to see whether the downturn in the market had passed.
“Those people who saw the extraordinary capital gains [in 2020 and 2021] didn’t want to sell because they were thinking that they might miss out on growth, but are now realising we’ve come back to a normal market,” she said.
Balich also said one reason more homes might be coming up for sale was that people who had started to live and work remotely in their Ōmaha baches more often were now looking for more permanent homes in the town and were putting their holiday homes up for sale.
For Duncan, meanwhile, the number of houses being listed doesn’t look like just a post-Covid reaction but a more notable change.
“I keep saying, ‘Oh my god, look there’s another one for sale, now another one’,” she said.