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Image: Tina Tiller
Image: Tina Tiller

MoneyDecember 8, 2021

Houses in this scenic Otago village sell for under $200k. So what’s the catch?

Image: Tina Tiller
Image: Tina Tiller

In Waipori Falls you can buy a house in the bush for less than the deposit for an average Auckland home. George Driver investigates why.

It’s paradise on paper. Waipori Falls village clings to the side of a forested ravine, surrounded by a Doc reserve. Its 30 houses are stacked on a zigzag of streets, looking out onto a waterfall that gives the town its name – and the power station that provided its reason for existence. There’s a town hall, but nothing else. 

Up the road there’s the scenic Lake Mahinerangi and rolling high country leading to the black schist torres, gold tussock and big sky of Central Otago. Down the road is the green Taieri Plains, leading to the east coast and Dunedin, about 50 minutes’ drive away.

But Waipori Falls’ biggest attraction isn’t its nature, landscape or isolation. It may be the most affordable place in the country. You can buy a house there for less than a deposit on an average Auckland home. Right now you could have the choice of two houses: a 90m2 1980s home on Morepork Lane for about $150,000; or a 100m2  “idyllic retreat” on Village Loop Road for $175,000, which has the distinction of being perhaps the only house in the country where its proximity to Mosgiel is a selling point.

Waipori Falls (Photo: Daniel Williamson)

But looking at recent sales, even these low prices may be a tad optimistic. In May, a 100m2 house sold for $112,000. In August last year, a 1955 two-bedroom on Morepork Lane went for $133,000. A quick TradeMe search reveals little competition in this price bracket. There’s a flood-damaged home in Westport for $120,000, or a former shop in a Southland town called Ohai (near a place called Tinkertown) that’s been converted into a one-bedroom house where everything is open plan. 

For those searching for a bargain, Waipori looks like a no-brainer. But is it?

There is a catch…

Waipori Falls was built to house workers at the nearby power stations and it was owned and run by the council-owned Dunedin Electricity Ltd. The company maintained the roads and the three waters, while the workers paid a popcorn rent and got free power. It had a school, heated swimming pool, a post office, general store, a fire station, and for 70 years a few dozen families called the place home. 

But Waipori Falls couldn’t survive New Zealand’s zeal for privatisation. In the 1990s, Dunedin Electricity decided it didn’t want to pay to house its workers any more. Or, as the head of the company said in a segment on Holmes at the time, “the village is a cost which can be eliminated”. The workers didn’t want to stay and pay market rents either. But then who would buy the houses and pay for the roads, sewerage and sizeable water treatment plant? Paul Holmes declared that it was a doomed community. 

The settlement of Waipori Falls in 1915, with the main power station building in the foreground (Ref: 1/4-125530-G. Alexander Turnbull Library, Wellington, New Zealand. /records/36998124)

But Holmes was wrong. The houses were sold off in 1997, but rather than incorporate the town into the Clutha District Council, the residents were lumped with maintaining their own infrastructure via a body corporate. The residents would get to decide their own fate – and live with the risks.

The houses sold cheap. Property records show that in the mid 1990s you could get a house for between $17,000 and $36,000 and it became home to a mix of permanent residents and holidaymakers – about 12 households live there permanently now. While prices have creeped up, they’re still among the lowest in the country.

Real estate agent Leona Munro has the two Waipori properties on the market and says there has been interest from around the country, and even from overseas. 

“A lot of people are wanting to live off-grid or further out of town these days,” Munro says. “We’ve had people making offers from Auckland and some email enquiries from people overseas wanting to come back home. People want to be mortgage free.”

Munro says Waipori is cheaper because of its isolation. The nearest supermarket is in Mosgiel, a 40-minute drive, while the nearest school is in Outram, 35 minutes away. The last 16km of the road is also unsealed. But she says Covid-19 has made people more willing to live and work remotely and have a different lifestyle.

The body corporate fees are also about $3,500 a year, on top of rates, but Leonie says that isn’t putting people off.

“The roads into town aren’t always the best, but because of the value of the place, it doesn’t seem to worry a lot of people.”

The two houses currently for sale in Waipori Falls (Photos: Trade Me screenshots)

But it’s not just the fees that are the problem. Recently headlines have been predicting doom for the village once more. Last year, the Otago Daily Times reported the town was struggling to maintain its infrastructure and one resident was concerned the place was at risk of being “shut down”. To avoid the costs of maintaining the wastewater system, some residents had been trying to do the work themselves and the system was deemed “moderately non-compliant”. There have also been concerns about the future of the town’s drinking water, after Doc announced it wanted to remove the only bridge access to a water pump.

Daniel Williamson first discovered Waipori Falls by accident. He was taking a detour on his way home to Dunedin with his partner, Kate, when they came across houses in the forest in the middle of nowhere.

“We thought ‘wow, what an amazing spot’.”

Then five years ago they saw a house for sale there with incredible views and an outrageous price.

“We went and had a look and it was absolutely enchanting. We fell in love with it. It’s a little piece of paradise. Most of the houses face Crystal Falls on the opposite side of the ravine and sometimes you just pinch yourself looking out the window.”

They bought the weatherboard home for about $85,000, finally getting onto the property ladder in their late 30s. Daniel is an aspiring writer – he just released his first book on Amazon – but still commutes to Dunedin for work, while Kate is an artist working from home. 

Daniel Williamson and his partner Kate bought their Waipori Falls home for about $85,000 five years ago (Photos: Daniel Williamson)

But then there’s the body corporate. When they moved, Williamson got involved with it and became chairman, but he soon became concerned about how things were run – he raised the issues reported in the ODT. 

“It doesn’t work so well,” he says. “I think it would work if you had 100 people. You could have enough money to have qualified tradespeople to do the jobs and no one’s personally invested in doing the work. But when you’ve only got 30 households, it’s too small of a group to have the dynamism and involvement of people to keep things going.”

Only about seven or eight people show up to the body corp AGM, he says. But with an annual budget of $135,000 and responsibility for the town’s sewerage and drinking water, there’s a lot at stake. 

Is that why house prices are so much cheaper?

“Yeah, it definitely is the body corp,” he says.

Daniel is hoping the town’s water infrastructure will be taken over as part of the government’s Three Waters project and that the council will take over the roads. He’s had talks with Clutha district mayor Brian Cadogan and Taeiri MP Ingrid Leary, but nothing has been agreed so far.

When I ask whether he regrets moving there because of these issues, there’s a pause.

“Yes and no,” he says, eventually. “I love the place enough that I want to see it change. There might be quite a simple fix and we won’t have these issues again. It is a stunning place. It just needs good people.”

Waipori Falls (Photo: Daniel Williamson)

Current body corporate chair Rod Jansen bought a house there for “around the $100,000 mark” five years ago and, after initially commuting to Dunedin, he retired to Waipori Falls.

“It was what I could afford, so I bought here. The environment is really beautiful, surrounded by the bush with waterfalls and great views. It’s a nice relaxed environment. It just seemed, at the time, like a no-brainer.”

Seemed… why the past tense?

“There are moments that are less enjoyable,” Jansen says. “It’s kind of isolated so you have to work together with your neighbours sometimes.”

People choose their words carefully when talking about the community – it feels like the strain of the body corp casts a long shadow. In a recent court case, one resident was sentenced to community work for writing an email with a racist slur to a fellow resident’s employer after an ongoing property boundary dispute.

When I ask Jansen what the community is like, his voice shoots up an octave and he carefully navigates the sentence.

“It’s a village and like all villages you’ve got people that are really good and… it’s a broad spread of a community, but on a much smaller scale, if you understand what I mean. Some of us are working together to maintain the village, and there are others that don’t.”

But Jansen says things are looking up. For a time, he says some houses weren’t paying their body corp fees and things were dire, but it is in a better position now.

“We got to a point a few years ago where we were completely not viable and people had to voluntarily work because we had no money, but now that we have finances so we can repair our infrastructure.”

He says everybody would like to see changes, “but at the moment the body corporate is the best possible way to go about doing it”.

“We’re just working through it as it comes. You have to realise you’re not coming to live in the suburbs with a council maintaining everything. 

“People need to fully understand the nature of what they’re buying into here. Because it is different.”

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