The real-time growth in the value of sections in suburban Rotorua is expected to be made public on a grand scale - when the final remaining blocks of bare land in a long-term residential enclave go under the auctioneer’s hammer later this month.
The 30 sections represent the final portion of residential sites which have been gradually sold off over in the area the past four decades.
The last remaining block of sections up for auction range in size from 766 square metres to 1,504 square metres - some having elevated views. The lots will have access off either Baxendale Drive or Great West Road, and are being marketed for sale at auction in Rotorua on February 25 through Bayleys Rotorua.
Civil earthworks creating the roading and utilities extensions to both Baxendale Drive and Great West Road have begun already in advance of the sell-down, taking advantage of the dry summer conditions. Power, water, telco’, sewerage and gas connections are in the process of being installed.
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The land - owned and operated as a dairy farm for generations by the Hunt family - was previously one of Rotorua’s biggest dairy farms on what was once the outskirts of the city. The first subdivision of the Hunt farm empire in the 1970s saw homes built in Buchanan Place, then in the 1990s along Cobbe Place in what was named Matipo Heights, which was duly followed by the creation of the second portion, known as Matipo Close. In the early 2000’s Baxendale was developed.
Then in May 2017, Baxendale Developments sold down 24 sections adjacent to the current offering in 90 minutes of fast and furious auction bidding. Those sale prices two-and-a-half-years ago ranged from $210,000 to $300,000 – for a total value on the night of $6.186 million. Some 200 people attended the auction – with buyers limited to a maximum of two sites each to avoid land-banking by developers and spec’ builders.
Real Estate Institute of New Zealand data show that in March 2017, in the lead up to the last Baxendale land sell-down, the median residential sale price for properties in Rotorua district was $335,000.
By comparison, the REINZ data shows that in December 2019, the median residential sale price for properties in Rotorua district was $465,000 – a leap of some 38 percent in two-and-a-half years.
Bayleys Rotorua branch manager Beth Millard anticipated that this month’s multi-site Baxendale section auctions would validate the REINZ stats - reflecting a substantial increase in land values in the city.
“While the REINZ residential stat’s do encompass land and existing dwellings, the comparison with bare section values runs slightly ahead of that 38 percent increase rate as the options to purchase undeveloped land are far more restricted than the availability of land with a home already built on it,” she said.
“In early 2017, the Rotorua residential property market was well and truly gaining momentum – increasing by some nine percent from the previous year, and dovetailing behind the likes of Tauranga and Hamilton, and of course Auckland…. and it hasn’t slowed since.
“With a dearth of Rotorua city-fringe sections available to purchase in the years following 2016, the buyers of those original Baxendale sites were at the front of the queue for submitting their building consents to the council, and most have subsequently gone on to have their homes designed, approved, and built. Many however missed out, and had to wait for other developments to stack up – of course paying more for their property as the market values continued to steam-roll on ever higher during the intervening period.
“Add into the current dynamic the reality that this auction will clear the final allocation of Baxendale sites…. once these are sold, there are no more. Again, that sustains values on the supply side of the age-old supply and demand equation. As the REINZ data highlights - those who bought Baxendale sites in 2017 have certainly banked impressive capital growth,” Ms Millard said.
“While some of that value growth is a natural consequence of inflation, the Hunt’s long-term vision for Matipo and Baxendale, along with the ensuing gradual sell-down programme, has also seen property values maintained through a tight control of supply – rather than dumping the entire development onto the market en-masse all those years ago.”
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