Buying a coastal property

People all over the world dream of living by the sea – taking evening strolls across the sand and falling asleep to the sound of waves hitting the shore.

Beachside homes, seaside villas and waterfront properties have been buzz words in the real estate market for years. However, as the frequency and strength of storms in New Zealand increases, so is the damage to the coast. Sea levels are rising, long-standing townships are now deemed ‘high-risk areas’ and natural disasters are front of mind around the country. Despite the risks, an estimated two-thirds of Kiwis live in areas that are vulnerable to coastal or inland flooding.

Benefits of purchasing a coastal property

Properties by the sea can be ideal for people looking for somewhere they can quickly connect with nature after a long day at work and take in some fresh sea air. They often evoke a sense of being on holiday while at home.

If you’re considering purchasing a property with investment or home and income potential, a house by the sea may be a strong contender. Not only are they attractive to buyers, but they’re also a drawcard for tenants and visitors to New Zealand looking for temporary accommodation too.

New research from The University of Exeter in England(external link) reports that people who live in coastal areas have better mental health than people who live inland. People who live within one kilometre of the coast are 22% less likely to show signs of mental health problems.

Living close to the sea is not only good for your mental health but also your physical health. Being close to nature can encourage you to head outside for exercise. Coastal towns are often a haven for outdoor activities — fishing, diving, swimming and watersports – and you can often find a slower pace of life. So, it’s understandable that by moving to a seaside property in a coastal town you can improve your wellbeing.

Value of waterfront properties

Houses by the sea are still some of the most expensive, even with climate change concerns. Homes.co.nz data(external link) shows that waterfront properties are at a premium throughout New Zealand with the median value of homes close to the water exceeding $1 million in 15 New Zealand towns.

Potential issues with coastal property

While coastal properties are often some of the most sought-after, there’s no hiding from the work and maintenance required to keep them. Some things to consider before you buy are:  

• Cleaning saltwater from windows
• Removing storm debris
• Saltwater damage to building materials
• Saltwater damage to your vehicles
• Saltwater damage to any exposed electrical systems

Long-term risks and potential issues to consider when looking to buy a property near the sea are:

• Coastal erosion
• Flood and storm impacts
• Vehicle maintenance if the road is frequently flooded
• Road access during storm conditions
• Stability of cliffs or steep slopes.

Effect of climate change

New Zealand buyers are not being put off coastal properties because of climate change but the impact cannot be ignored.  Environment Aotearoa 2019(external link) shows climate change is already affecting New Zealand. Global temperatures have risen almost 1 degree Celsius above pre-industrial levels, which exceeds any natural rates of change. The Ministry for the Environment(external link) states that rising sea levels will increase the risk of erosion, inundation and saltwater intrusion.

What precautions should you take before purchasing a coastal property?

Confirm you can get insurance on the property

Check whether the property you are keen to buy can be insured and what the cost of insurance is. A property in a high-risk area may not be insurable or might be expensive to insure.

You should be aware that insurance companies are reassessing how they cover coastal and clifftop properties, or properties in low lying areas that may suffer from seawater inundation due to the increased risk of environmental damage or rising sea levels. This means that premiums may increase, exclusions may be added, or insurance cover may be withdrawn for some properties as the risks change.

Consider what EQC covers

The Earthquake Commission (EQC)(external link) doesn’t cover damage to land from coastal erosion (although it does cover storm and flood damage to land) or damage to residential structures or contents from storms, floods or coastal erosion.

Ask the real estate agent (or the seller, if it is a private sale) if the property has been affected by storm or flood erosion and whether there has been an EQC claim. If there has been damage to the property as the result of a natural hazard, the seller and the agent are legally obliged to share that information with buyers.

Check the property title and LIM report for any history of flooding

Council information and a LIM report should identify specific erosion hazards. The property title and the LIM report may include a history of flooding as well as potential flooding hazards. Some councils provide flood maps, which show the area’s risk of flooding.

If you’re considering living in a coastal area, find out about road access during storm conditions and consider the cost of vehicle maintenance if the road is often inundated by saltwater.

Choose an accredited property inspector

One of the tough things about buying a home is that you don’t know what you don’t know. A good place to start can be using our Property Checker tool. But, to help you identify any defects or future maintenance, or issues related to coastal property, you should consider employing a qualified property inspector too. They will check the entire property and tell you about the condition it is in. If there is any cause for concern, you may wish to consult a specialist engineer.

Living by the beach is a dream shared by many and if you are aware of the risks and have done your research, buying coastal property can be a great decision. Try not to get caught up by the captivating sea views and take your time.