Cut-price paradises

Awana Bay on Great Barrier Island. Photo / Paul Rush

Buyers - rich and not so rich - have almost unprecedented opportunities this summer to nab their very own pieces of cut-price paradise as a spate of coastal properties come up for mortgagee sale.

Through most of the past decade, New Zealand beachfront properties have more often sold to multimillionaire overseas investors like Julian Robertson, the owner of the Kauri Cliffs and Cape Kidnappers golf resorts.

But the past year's recession, bad news for some owners, is proving good news for potential buyers with a yearning for their own slice of sun and surf.

A 26.3ha beachfront property on Waiheke Island is expected to go for well below its $6.46 million value when it is auctioned off in late February.

Agent Michael Pleciak of Bayleys wouldn't speculate on what it might go for, but did say the property was likely to be "very good buying" for someone. "It is very unusual to get a large piece of land like this at the bottom east end of the island. Often these are tightly held."

The property, at Awakiriapa Bay at the eastern end of Waiheke, was owned by developer Andrew Ellis through his company Cowes Holdings Limited, now in liquidation.

Ellis had begun subdividing the land into five lots. One of the lots, at the back of the property, has an existing three-bedroom house with sea views, while the other four are vacant but border the beach. The new owner can choose to continue subdividing or retain the land in one lot.

According to the first report of liquidators PricewaterhouseCoopers, Ellis had entered into a conditional sale and purchase agreement for a section of the land, but this was dependent on resource consent being given for the construction of a deep-water wharf.

Resource consent was initially granted, but overturned on eventual appeal to the Environment Court.

"Following the unsuccessful attempt to obtain resource consent, the decline in property values, particularly bare land, combined with the global recession, meant the land was unable to be sold at a value that would enable the mortgages against the property to be repaid," said an August 2009 liquidator's report.

Ellis declined to comment.

Another idyllic island property will be auctioned off by Westpac as a mortgagee sale on February 10. The three-bedroom bach at Awana Bay on Great Barrier Island is just steps from a beautiful surf beach and is described by agent Bayleys as "one of the country's most extraordinary properties".

With a capital value of $2.12 million, the property was last purchased for $2.75 million by Great Barrier Developments Ltd, whose directors are property developers Andrew and Tina Grimwood.

On the mainland, a beachfront property at Mangawhai Heads is also being sold at the February mortgagee auction.

The 5ha property is one of only four beachfront lots in the 404ha BreamTail farm development, whose residents share riding trails and stables, two tennis courts, a beach lodge and a pool. Agent Christine Birss of Bayleys says the lot, which has a vacant house site, is "a very special spot".

The property is valued at $2.15 million, and Birss says it's anyone's guess what it will go for - but it's likely to be under $2 million, possibly as little as $1 million.

Further north, a beachfront section at remote Henderson Bay is likely to sell for barely half what it's worth. The 6ha property, 50km south of Cape Reinga, has 300m of white-sand beach frontage and houses a modest two-bedroom brick home.

Agent Alan Broadbent says it is expected to sell for "considerably below" its $1.25 million valuation.

The owners bought the property about five years ago and "hoped to have it forever", but were victims of the recession.

And if million-dollar properties are a little beyond your reach, another Far North beachfront property is also offering a genuine bargain at mortgagee sale. The vacant section at Tokerau Beach on the Karikari peninsula is listed for just $320,000 - far below its capital value of $500,000.

In Auckland, that money would buy only a two-bedroom cottage, if one was lucky. But on the peninsula, it will be one lucky buyer's own piece of cut-price paradise.