New Zealand island defies global property downturn

A tiny island off the coast of New Zealand is outperforming the current property market downturn.

It is predicted that property, especially waterfront property, will continue to grow in value on Waiheke Island which has just 8,000 inhabitants and is a 35 minute ferry ride from Auckland.

According to the latest Waiheke Island report from estate agents Bayleys the market has outperformed New Zealand real estate trends for over 20 years.

The report shows that beachfront property on the island has grown by approximately 19% per annum every year since 1982, and while this rate has slowed in recent years, the long term view was for further gains.

Bayleys research analyst Sarah Davidson said Waiheke's positive property future as both a permanent residence and holiday home resort was underpinned by an excellent ferry transport system which compared favourably against road routes for similar holiday destinations in the Coromandel and Rodney districts.

'With approximately 100 kilometres of coastline, waterfront property makes up a significant proportion of the local market. Market reports suggest that absolute waterfront property is generally tightly held, restricting the number of properties brought to the market,' she said.

'This has led to significant value increases in absolute waterfront land in key waterfront markets,' she added.

Additionally, new Auckland City Council bylaws will have the effect of limiting the amount of Waiheke development land brought to the market, which will help to support value growth, she predicted.

The island is popular for its beaches, vineyards and olive groves. It is so easy to get to that it is regarded almost as a suburb of Auckland.