TelferYoung (Northland) Limited
Northland Newsletter - June 2006
26 June 2006
Marsden Point - The Hype & The Reality
Marsden Point - The Hype and The Reality
The intention to create a deep water cargo/container port at Marsden Point goes back to the early 1960's, at the time the Oil Refinery was first established. At that time large tracts of land were zoned at 'The Point' for industry, based on the expected future establishment of a port and support industries.
In April 1981, a Marsden Point Environmental Investigation Report in regard to a deep water port was prepared, again signalling the intentions of port development during the 1990's.
Planning Hearings in 1998 and 1999 cleared the way for the port development in the new millennium.
From the 1980's through the 1990's there was little movement in the industrial land value with large tracts of 'heavy industrial zoned land' (30-60 ha) selling in the range of $10,000 - $20,000/ha. Once the planning hearings of 1998 and 1999 were completed, significant value increases were signalled with the above rates lifting to $50,00-$60,000/ha in 1999.
On the back of development expectations (and some would say 'sales talk') achieved prices and asking prices for Business 4 zoned land (heavy industry), and that with potential for industrial use, have climbed steeply to values in excess of $500,000/ha.
But what is the reality?
- The Carter Holt Harvey LVL plant established around 2001 on some 17 ha of leased land adjoining the refinery is now a major producer and exporter of Laminated Veneer Lumber product.
- Two wharf berthage areas are established at the port and a third is due for completion in 2007. These berths are the base for timber, chip, log and general cargo trade and hopefully the start of container trade.
- A number of timber and wood processing plants have become established in the greater area.
- The Marsden Cove Waterways project a large scale waterways/residential subdivision is well under construction.
- The following projects are in the wings.
- The Might River Power 300+ M/W power project based on the unused Marsden Power Station, has successfully been through the approval process, however appeals have been lodged and have yet to be heard.
- Discussions are proceeding with a major wood processor to establish close to the port area.
- A major industrial complex with upwards of a $200 million budget for plant and buildings is currently under consideration at Marsden Point with land leasing options currently held.
- The New Zealand Refinery Company advise that currently a Front End Engineering Design costing some $25 million is being completed to investigate a further expansion of the refinery. The proposal will be put to the board in December this year or February 2007. A decision whether or not to proceed with a refinery expansion in the order of $500 million will then be made and advised soon after.
Much discussion has taken place on potential major subdivisions for industrial purposes but to date no certain decisions have been made. No doubt realistically achievable land values play a part here as well as the restriction created by the limitations of the existing Whangarei District Council sewerage system for the area.
The major plus for the locality is the existence of the excellent deep water port, and an ample area of industrial (and potential industrial) land. Of the approximately 300ha of such land, the Port Corporation is a significant owner as is Land Resources FP Ltd, leaving little large tracts of heavy industrial land in other ownership.
A matter yet to be decided that will no doubt have an effect on the growth of the Marsden Point Area will be the establishment of a rail link between the port and the main rail line at Oakleigh. This is seen by most as essential for the full realisation of potential for this area.
It has yet to be seen what effect the involvement (by way of shareholding) the Port Of Tauranga (as a Partner in Northport), and the Ports of Auckland (as a shareholder in the Northland Port Corporation) have on the rate of growth for the area. Surely their presence reflects their optimism for the area which investors should take into account.
Is Marsden Point another Mount Maunganui? Only demand and time will answer that question. John Hudson
Welcome Back 'Huddo'
After some 27 years in practice as a Partner and Registered Valuer with Robisons Valuers Whangarei, John Hudson through his newly formed company took on the challenge of Business Manager at L.J. Hooker Whangarei in 2001. After 5 very successful years in the management seat John has decided it is time to slow down "just a little" and has retired from the Business management role. He will continue to offer Property Consultancy and Arbitration services through his own company John Hudson Consultancy Ltd, but in addition has agreed, on a limited basis, to complete selected valuation assignments within and through Telfer Young (Northland) Ltd.
As an original partner in Robisons Valuers John is familiar with the Telfer Young (Northland) Ltd philosophy and has acted for many of their existing clients. He looks forward to renewing many old acquaintances and we welcome him back into the team, "the eagle has returned to his nest".
Statistics Revealed
While it is likely the provisional census statistics will be used by many for varying reasons (some of which are likely to conflict) here are a few facts.
Statistics New Zealand has released the provisional Census counts from the 32nd New Zealand Census which took place on 7 March 2006.
Highlights - Nationwide
- New Zealand breaks 4 million people (Census night population 4,116,900 up 7.8% from 2001 Census vs only 3.8% growth between 1996 - 2001 censuses).
- Population drift from country to cities appears to have slowed ("fewer territorial authorities showed a decline" and "the rate of decline" is generally smaller").
- Auckland Regional Council had greatest population growth. An increase of 145,060 people brings the population to 1,318,700 (32% of New Zealand's population).
- More dwellings in New Zealand, 1,469,700 occupied dwellings up 7.4% from 2001.
- Little change in dwelling occupancy rates (2006 - 2.8, 2001 - 2.79, 1996 - 2.87).
Highlights - Local
- Whangarei second most populated district with 74,100 people.
- Whangarei population increasing at 8.2%, faster than New Zealand average and well up on 1.9% recorded between 1996 and 2001.
- Whangarei now has 27,700 occupied dwellings, up 8% on 2001 census.
"A judicious man uses statistics, not to get knowledge, but to save himself from having ignorance foisted upon him" - Thomas Carlyle.
Statistics New Zealand expects to release Final Counts in late November 2006.
At a recent "economic outlook" function a leading economist noted the following. Economic growth has slowed over the past year from 4.4% to 2.2% with forecast growth at 1.1% 2006 and 1.5% 2007. As valuers we need to carefully interpret trends as they impact on our Northland property market. The good news is we now have 1.46M people nearby in our southern suburb that continue to recognise Northland as an alternative opportunity.
Bream Bay Lifestyle & Residential Market
Normally each year the residential and lifestyle market quietens off approaching winter. However in 2006 the level of market activity, or rather the lack of it, is far more pronounced. Policies of the Reserve Bank Governor together with his rhetoric have finally started to take effect and the number of buyers has steadily decreased throughout 2006. On a brighter side, the buyers that remain are generally cashed up and genuine, and will purchase as long as the price is realistic. In other words, the speculative element has completely gone from the market.
As alluded to in our last newsletter, the market is definitely two tiered. The top of the market, in excess of $1,000,000, still continues to be strong. A number of sales of properties not even listed on the market have occurred in Langs Beach over recent months. This is in stark contrast to residential sections in the three subdivisions in Tamure Place, Ruakaka where sales have been very slow since February. Sections are still selling at La Pointe and Kohi Lakes at One Tree Point, however these have also slowed significantly.
What the future holds is difficult to predict but we anticipate more of the same. The buyers in the million dollar plus price bracket generally have the money and will buy as long as the property has what they want. In contrast, both sections and houses at the lower end of the market will continue to be sluggish and far more price sensitive.
Footnote: Bream Bay covers the coastal region south of Whangarei comprising Marsden Point, One Tree Point, Ruakaka, Waipu Cove and Langs Beach and is serviced by Mark Aslin.
Back issues of the newsletter can be obtained from TelferYoung (Northland) Ltd
17 Hatea Drive,
PO Box 1093,
Whangarei,
New Zealand.
Telephone : 09 438 9599,
Facsimile : 09 438 6662
www.telferyoung.com
email: telferyoung@northland.telferyoung.com
+ Alistair Nicholls + Steve Baker + Mike Nyssen + Grant Algie + Julian Rattray + Nigel Kenny + Mark Aslin + Craig Russell + John Hudson + Aaron Hunt + Martyn Cottle
Opinions expressed in this newsletter are of a general nature and should be used as a guide only. TelferYoung should be consulted before acting on this information.