Reality Check: Why the coastal property market is still pumping

A lack of supply of beach houses on the Coromandel peninsula means the three level white house with the red roof at Hahei is expected to sell at auction on July 23. Contact Judi Bilcliffe, Century 21, ph 0274 733 266.

Sun, Sand, Beach, Bach. Ask any New Zealander where they really,really want to be and odds are
it will be near the sea.

That keeps real estate agents in coastal settlements busy year round.

Bob Hargreaves from Massey University 's property unit says while high profile marketing campaigns from some of the larger real estate companies have contributed to the high prices
being paid for some coastal properties,"there is something innate in humankind where people
like to live near bodies of water."

Hargreaves says apartment style developments near the water will become more common.
"People want to live by the sea but can 't afford it, so more developers will look for situations to exploit.

Warkworth realtor Barry Gillespie of Harcourts says demand for coastal properties north of Auckland is still strong. "If it is a waterfront section it will sell very quickly,"Gillespie says.
"The best way to realise the maximum price is to go to auction. I don 't like to put a price on
anything.The minute you clinch a deal, that automatically sets a benchmark and the market
goes away again."

But valuer Stephen Jack from Warkworth firm Hollis and Scholefield says while the cold
weather hasn 't taken all the heat out of the north Rodney coastal property market, there are signs
it has peaked for the time being.

"Buyers are being more selective and some overpriced property is taking longer to sell than
previously. There is no sign of any decline in values, "Jack says.

An Omaha beachfront vacant lot recently sold for $1.6 million, 44 percent above 2004
rating valuation. That beats the previous high for Omaha of $1.36 million.

Two reported sales of developed land on Omaha beach this year were for $2.15 million
and $2.4 million.

Round the corner in Point Wells, fairly basic cottages onto the estuary have sold in the $900,000s.

Two developed properties on the Leigh cliff top sold for $1.2 million each in recent months -
one 40 percent, the other 75 percent above the 2004 rating valuations. Another Leigh cliff top
house went for more than $5 million, more than three times the 2004 valuation.

Houses are selling for $1million plus on Kawau Island, and there are several residential and rural  subdivisions at various stages of development on the eastern edge of Kaipara district.

"Mangawhai Heads is on the verge of snowballing into a fully fledged urban area as opposed to a seaside holiday destination, ''says Jack.

''Very few waterfront properties change hands there due to a lack of supply, and the most recent sale of a harbour front section was for $915,000 in February."

Over on the Coromandel peninsula, John Cullen from Whangamata valuers Townshend Cullen says the boom of the past four years may be over.

"It has come back to normal, where things slow down over winter. We have not seen a slip in values, but the asking price is coming back, "Cullen says. While supply is limited, there are
fewer buyers around than last year.

In May the median price for the Whangamata area was $430,000 on low volumes, compared to
$340,000 in May 2004.

Like the north, beachfront property doesn 't come for less than seven figures. "The rule of thumb is a beachfront property will have twice the value of one immediately behind, "he says. The days of the fibro bach may be numbered though people are looking for substantial homes or even apartments.

Cullen says it is not uncommon for people to sell a house in Auckland, shift into an apartment
in the city and spend their weekends in a substantial beach house.

"I went for lunch in Whangamata last weekend, and every cafe was crowded and it 's just past the shortest day."