10 September 2024
Plans to sell Fiordland homes for under $200k
Imagine snapping up a two-bedroom home, in Te Anau no less, for around $190,000.
Or what about a one-bedroom, installed and connected, for $160,000.
These are the options available in Te Anau’s planned 30-unit worker village designed to solve one of the tourist town’s biggest problems.
Because, as Fiordland Business Association (FBA) surveys have found, a lack of worker accommodation is one of the main barriers to growth for many of the region’s businesses.
The Fiordland Housing Project on Alpine Drive already had council approval in principle, FBA chair Nathan Benfell said.
The Fiordland Museum Trust will be leasing the land to the FBA, but investors will hold titles.
“Investors would sign up subject to the minimum requirement of 30 units being met,” Benfell explained. If fewer investors signed up, the cost would need to be recalculated.
The association first pitched the idea to the community back in April and it’s been doing the groundwork to prepare an investor pack, which was sent out this week.
“We’re at a point now where it’s either going to make or break,” Benfell said.
A Preliminary Information Memorandum submitted to the Southland District Council in May identified minor non-compliance issues but “underscored the project’s feasibility”.
Fabricated home builders Genius Homes then designed service specifications and plans along with financial modelling.
Rent appraisals from Ray White and PGG Wrightson Real Estate showed investors could expect rental incomes of $280 to $330 per week for a one bedroom or $360 to $440 for a two bedroom.
But Benfell said the homes would also work for young families looking for easier access onto the property ladder.
“It might be a great stepping stone.”
Rules would be in place to make sure the homes were being used for their intended purpose, Benfell said, like stipulating that at least one occupant should work in Fiordland.
“It’s designed to mitigate against short-term rentals, because that just adds to the problem.
“We’re sort of breaking a new mold,” Benfell added, referring to the fact the land would be leased from the trust rather than bought.
“It took a little bit of creative thinking.”
On the advice from Preston Russell Law, the FBA will set up an incorporated society to lease the land for a 15 to 20-year term, with a process for potential time extension set out in its constitution.
But rather than do this work and invest in the incorporated society from the outset, investors will all contribute a share when they buy in.
The association has gone back to 32 investors who have already registered their interest but will be casting its net wider to get the units sold.
Some of the interested parties may have already made commitments to house workers, Benfell said.
He expected the project to be rolled out 10 units at a time but all the infrastructure would need to be built from the start.
A decision on whether the project will proceed will be made within the next two months, possibly bringing new homes into the rental pool by the end of the next summer tourism season.
“We’re a little behind where we wanted to be, but we needed to make sure we did the ground work thoroughly,” Benfell said.
A survey of Fiordland businesses last season showed more than half had one to five vacancies they couldn’t fill because there were no long term rentals available for workers.
Financial modelling by Great South showed that if 56% of the region’s businesses had just two vacancies it would lead to a $6 million loss in GDP for the Fiordland economy.
That number jumped to $8 or $9 million if those businesses had three vacancies.
Southland District Council mayor Rob Scott commended the community for taking ownership of the problem.
The council was working closely with the FBA team, he said.
“We’re providing as much support as we can to get it off the ground.”
Source: The Southland Times – 10 September 2024