Whakatane: Basking in the sun
The Eastern Bay of Plenty offers a range of opportunities for property investment, as well as an attractive lifestyle as Jo Ferris discovers.
Tuesday, October 2nd 2007, 12:00AM
by Jo Ferris
Whakatane might lie in the shadow of its richer Western Bay of Plenty neighbours, but the Bay’s east-enders relish being more low-key, with high sunshine hours supporting their catchphrase, “living with the sun”.
The 433,000-hectare district is a triangle flanked by fishing, hunting and history – and features New Zealand’s only live marine volcano, White Island. Tourism is buoyant and the district hosts New Zealand’s largest tuna tournament, celebrates a summer arts festival, holds numerous sports events and cherishes its Maori history.
Whakatane is Eastern Bay of Plenty’s main town in a district stretching 54km along the coast from Otamarakau to Ohiwa, and inland to Edgecumbe, Taneatua, Te Teko and Murupara.
Whakatane is within an hour of Tauranga and Rotorua; and four hours from Auckland. It has air service, state highway links and freight rail to Port of Tauranga and beyond.
Census 2006 shows a population of 33,000, with about half in Whakatane itself. Growth forecasts vary. Statistics New Zealand’s March 2007 quarterly report predicts less than 1% growth to 2026, while Whakatane District Council is more positive at 10% and planning accordingly.
Council director of environment and policy David Bewley says a stronger economic development framework gives a clear message that the district wants and is prepared for population growth.
“It is hoped this will give greater certainly to investors – these initiatives, along with physical attributes of the district, its reputation as a great place to live and work and a likely accelerated move of people from Western Bay eastwards will generate population growth.”
Commercial development
Non-residential consents in the year to March 2007 were up 55.1%, hiking commercial property value by 25.3%. Development has mainly been in educational and retail facilities. Whakatane’s biggest employers are within retail, health and community services.
The Hub – a new mega complex on Whakatane’s fringe at Gateway – includes big-gun anchors Harvey Norman, Bunnings and K-Mart. With 18,000 sq m of retail space, The Hub isn’t yet full, and appears desolate right now.
Adjoining industrial land is being developed and Bay Valuation Services reports a 2000 sq m section that sold at auction in January for $731,000 resold two weeks later for $794,000.
The megastore is creating some unease among retailers and this is reflected in landlords scaling back their expectations of rent increases, according to valuer John Lindup.
Historically, he says there has been little difference between freehold and leasehold sales – both being accepted for investment purposes.
Public outcry continues over regional council Environment Bay of Plenty’s recent decision to move its head office from Whakatane to Tauranga.
The east’s prosperity certainly doesn’t match Tauranga’s dizzy heights – and for property investors, it poses a double-edged sword. Locals relish Whakatane’s slower growth. However, one argument suggests Tauranga’s congestion will push people down the coast.
Pulp and paper mills at Whakatane and Kawerau are big employers. Fonterra has a large dairy processing plant at Edgecumbe, and Mighty River Power is building a geothermal power station at Kawerau. Agriculture is a big economic player, while growth in manufacturing, property and business construction all increase reasons to invest.
Whakatane is within commuter distance of Tauranga, delivering more options about where to live and work.
House market
Whakatane glows with higher recorded sunshine hours than elsewhere in the country, according to council readings.
The council tallies 11,883 households – 66.6% privately owned or mortgaged. The Whakatane Beacon in August reported an influx of new-home orders among builders, mainly from out-of-town investors and North Island retirees.
There is a general feeling that property in Whakatane – especially at Ohope – doesn’t produce high rental yields. Potential is seen more in long-term capital gain.
According to L.J. Hooker Whakatane figures, the first half of 2007 showed increased sales and higher price averages. Whakatane’s June average dipped at $301,339 (211 sales); but Ohope’s peaked at $874,143 (64 sales); Edgecumbe’s top price was $244,250 (21 sales) for the same period.
L.J. Hooker managing director Gary de Haan says Whakatane’s market remains steady. “There are a lot of retirees and holidaymakers looking at Whakatane,” he says.
De Haan tips the odd bargain but these are becoming few and far between. Resort-like Ohope has nothing under $400,000-$450,000. Ocean views or beachfront properties rise to $800,000 with true beachfront now more than $1 million.
Apartments at West End and new complexes near completion at Port Ohope all offer opportunities. Whakatane has two riverfront apartment complexes and earthworks have begun on a major 43-unit complex.
Lindup and fellow valuer Brian Phipps believe Whakatane is one of the country’s best kept secrets.
Business brings people and Phipps would like to see urban development luring cashed-up Aucklanders to relocate. Whakatane and surrounding townships are ripe for the picking, he believes. Sections are becoming scarce. He sees room for another 1000 sites, but first land must be opened up.
Bewley says the council is developing a growth policy in residential, industrial and retail.
“It is currently anticipated that Whakatane and Ohope will need about 85ha of additional residential land over the next 30 years.” Bewley says the council envisages opportunities around the coast and inland, with scope for mixed density dwellings.
Whakatane’s longest – and biggest – developing estate, Coastlands, is nearing completion. It comprises 17 stages totalling 400 sites. What first sold for $8000 in the 1980s now starts at $268,000, with more than $1 million for the last beachfront position.
Rentals
Professionals earlaustin.co.nz Ltd handles nearly 500 rentals – probably Whakatane’s biggest supply. Tenant demand outstrips supply, according to the firm’s property manager, particularly for three-bedroom homes with garage and acceptance of dogs.
Whakatane rents range from $170-$230 pw for two bedrooms and from $270 for three. Ohope rents are higher, but seasonal. Nearby Edgecumbe rents range from $230 to $250 for three bedrooms.
Good buys include a two-bedroom brick home on 814 sq m in Taneatua for $135,000. Asking price for a similar two-bedder in Whakatane is $249,000, which could rent for up to $230pw.
Mark Williams of Rotorua Property Investors Association says Whakatane is considered more from a lifestyle, long-term perspective. Kawerau offers better prospects, he says, with its pulp and paper mill and power station bringing workers.
Five years ago, Kawerau sections sold for $2000, compared with $65,000 today. Three years ago, average house prices were less than $100,000; today they’re $150,000.
Auckland-based investor Carmel Murphy happily bought in Whakatane and is looking for more. Originally from neighbouring coastal Matata, she knows the area, has good contacts and found a property now producing 9% return.
With new district valuations due this year, Phipps and Lindup loosely estimate rising values of 60% in the past three years.
Quotable Value’s quarterly index figures support the gain, but show a flattening over the past three years.
Its latest quarterly price movement report for the three months to July indicates 5.7% annual growth for Whakatane compared with 12.7% nationally.
With winter gone and spring here, Whakatane will continue to bask in its sunshine. The council will keep boasting that fact and White Island will keep rumbling. Roll on summer and a heated property market.
District snapshot
Whakatane district represents less than 1% of New Zealand’s population, and comprises 42.2% Maori. Population density is below average at seven people per sq km, compared with 15 nationally.
Whakatane is the landing place of the Mataatua canoe and home to New Zealand’s oldest pa site, plus significant historic sites.
Unemployment is about 5% with median annual incomes $22,000 – $2000 less than the national average.
Agriculture is a significant economic driver, with more than 1000 farms including dairy and horticulture. Tourism activities feature White Island walks, swimming with dolphins and trekking in Te Urewera National Park or Whirinaki Forest. Industries include pulp and paper mills, dairy processing and a geothermal power station under construction.
Looking to the future
High sunshine hours enhance the district’s push for tourism. Whakatane and Ohope are key attraction areas, with Ohope Beach and Ohiwa Harbour particularly popular.
Trendy Whakatane suburbs include the Coastlands beachside estate at Piripai and Otarawairere above Otarawairere Bay. Hillcrest overlooks Whakatane and has views to Whale and White islands.
The council is working with neighbouring authorities to develop a strong and robust strategy to attract business, promote development and increase the population.
| « Saffron Development - an investment opportunity you can't miss | Wellington: Simply Steady » |
Special Offers
Commenting is closed
|
|
Printable version |
|
Email to a friend |
