A perception of rapid growth in Wanaka in the future may be contributing towards a trend for land banking in the region, real estate figures suggest.
Real estate agent Kylie Stewart, of Sotheby’s International Realty, has advertised in the New York Times a 20ha lot in Mount Barker near Wanaka Airport as the new “place to be” and recommended it would be suitable for land banking.
“There does seem to be a number of people calling me about land banking in Wanaka.
“The way that the town is growing, it’s got numerous opportunities, and there are a few prospects that would be great to invest in now,” Miss Stewart said.
Regional salesperson Quentin Landreth, of First National, has several listings, including an 8ha block and a 17.4ha block by Lake Hawea.
On one listing he noted Lake Hawea was growing rapidly and it stood up as a strategic land bank for the future.
“There’s no secret about the demand around Wanaka at the moment,” he said.
“The end use isn’t going to be farming.
“The trend goes from lifestyle blocks and then they get cut up further into smaller sections,” Mr Landreth said.
One new venture by entrepreneur Mike Pole aims to open up opportunities for young people to invest in the future of Wanaka by being part of a 10-year land banking scheme.
Mr Pole said he had signed a sale and purchase agreement for 40ha of land near Wanaka Airport between Mount Barker Road and SH6.
He said he would invest nearly $2million dollars to buy the land and set up a new property company.
The aim would be to land bank the property for 10 years.
Shares in the company would be offered for $100,000, with a deposit of $30,000 and the rest paid over five years.
According to Mr Pole, land banking involves strategic purchasing of land where there is an expectation of high returns over a long period.
Often this was driven by expansion of towns or changes in zoning that could dramatically increase the value of the land.
“Land historically goes up by 5%-7 % a year, but of course we know that a developer coming in at a later stage would see far more value than that,” Mr Pole said.
Mr Pole said he would play devil’s advocate and look at the minimum growth, but he believed that over 10 years there would be large value increases.
Mr Pole first visited Wanaka in 1998 and fell in love with the place, and had been coming back every few years.
His two sons, Tom Pole (29) and Zak Pole (31) were the trigger for finding a scheme that young people could be involved in.
“Talking to people you meet, young people in particular, they all say the same thing – ‘there’s problems down here, we can’t get in’.
“Young people can’t get into the market – they don’t have million dollars, ” Mr Pole said.
Lawyer and partner at Aspiring Law Mike Toepfer said the benefit to buying and holding on to land was that you made a capital gain, but warned that if you were buying to resell, there would be a tax on the profit you made.
Mr Toepfer said you had to predict where the town was going to expand – if a council decided to move the town in another direction away from your land, or changed zoning plans, then you would not get the expected growth in value.
“There is the potential for big increases if you chose land on the fringes of a town and wait for it to expand,” Mr Toepfer said.