Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Sea-level Threat Yet To Dampen Demand For Coastal Property

New Zealand could be in deep water if we don’t dampen our enthusiasm for coastal real estate.

Scientists predict that our sea level will rise by at least 10cm and likely even more over the next 20 years or so, which will increase the frequency and severity of coastal flooding in this country and could possibly even lead to more than 10,000 homes becoming uninsurable by 2050.

Despite that ominous warning – which was most recently reiterated by Belinda Storey for the Deep South National Science Challenge last month – coastal property remains amongst the “hottest of hot commodities”, according to Quotable Value (QV) general manager David Nagel, who expected it to remain that way for the foreseeable future.

“We Kiwis love the ocean. We want to be in it, on it, and near it – especially this time of year. But it seems that we have failed to heed the warnings for far too long now and I still don’t think that the message is getting through to most people yet. The sea level will rise and the odds of more extreme weather events is set to rise alongside it.”

In Wellington, for instance, a 12cm rise in sea level could make a 1-in-100 year flood up to five times more likely to occur. “As a local property owner, that particular statistic does concern me quite a bit,” Mr Nagel admitted, “and yet we Kiwis continue to snap up coastal property at a rapid rate.”

He’s not the only one who is alarmed by the slow-moving threat of sea-level rise, and yet of the more than 20 QV property consultants and valuers surveyed for this story nationwide, nearly all of them named coastal areas in their region as the places most likely to go up in value this year.

On the Coromandel, QV property consultant Jarrod Hedley said the threat of sea-level rise had not dampened demand for coastal property. “Residential house values have continued to grow very strongly over the last six months – particularly on the eastern side of the Coromandel.

“Though we’ve seen the most growth at the lower end of the market in coastal areas, there remains strong demand for higher value beach-front property.”

Similarly, property consultant Derek Turnwald said demand for coastal property remained strong in the Bay of Plenty. “Auctions and open homes continue to be well attended with homes generally selling well above seller expectations.

“I do expect things may cool slightly when the LVRs take effect once more, but demand will likely remain high on the coast this year. People want to live near the water.”

Mr Nagel warned Kiwis to be more aware of the risks before they purchase coastal properties. “Do your due diligence. Don’t just adopt that classic Kiwi ‘she’ll be right’ mentality – actually look very carefully at the risks, one of the biggest being the ability for coastal homeowners to get access to full insurance cover in the future,” he said.

Insurance companies have already warned that coastal properties may become uninsurable as climate change kicks in. The difficulty then becomes not just the risk of damage or loss to property, but without insurance, it’s unlikely a mainstream bank will lend funds to purchase coastal properties.

“That could significantly reduce the pool of buyers capable of purchasing coastal property, and therefore cause prices to drop drastically. If we take heed of the warnings from the insurance council and the major insurers, it’s just a matter of time before the landscape changes, literally!”

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

CTU 2021 Work Life Survey: COVID And Bullying Hit Workplaces Hard, Huge Support For Increased Sick Leave

New data from the CTU’s annual work life survey shows a snapshot of working people’s experiences and outlook heading out of 2020 and into the new year. Concerningly 42% of respondents cite workplace bullying as an issue in their workplace - a number ... More>>

Smelter: Tiwai Deal Gives Time For Managed Transition

Today’s deal between Meridian and Rio Tinto for the Tiwai smelter to remain open another four years provides time for a managed transition for Southland. “The deal provides welcome certainty to the Southland community by protecting jobs and incomes as the region plans for the future. The Government is committed to working on a managed transition with the local community,” Grant Robertson said. More>>

ALSO:

Economy: Strong Job Ad Performance In Quarter Four

SEEK Quarterly Employment Report data shows a positive q/q performance with a 19% national growth in jobs advertised during Q4 2020, which includes October, November and December. Comparing quarter 4, 2020, with the same quarter in 2019 shows that job ad volumes are 7% lower...More>>

NIWA: 2020 - NZ’s 7th-warmest Year On Record

The nationwide average temperature for 2020, calculated using stations in NIWA’s seven-station temperature series which began in 1909, was 13.24°C (0.63°C above the 1981–2010 annual average). New Zealand’s hottest year on record remains 2016, when... More>>

Quotable Value New Zealand: Property Market Set To Cool From Sizzling To Warm In 2021

Nostradamus himself could not have predicted the strange series of events that befell our world in 2020 – nor the wild trajectory of New Zealand’s property market, which has gone from “doom and gloom” to “boom and Zoom” in record time. Even ... More>>

PriceSpy: Research Reveals How Shopping Behaviours Have Changed This Christmas

According to a new survey* from PriceSpy , almost 50 per cent of Kiwis are looking to shop locally this Christmas in light of Covid-19; The research also found consumers are changing their shopping habits, with one in seven (14 per cent) getting super-organised ... More>>