Average Whangarei house price almost $500,000

Suzanne, and twins Liam and Riley, enjoy their new $500,000-plus home - the average price of Whangarei homes now sits just shy of $500,000. Photo / Tania Whyte

A rise in the average property value in Whangarei to just $5 short of $500,000 has prompted calls by a local investor to the Government to help first-home buyers.

Whangarei social worker Suzanne, who does not want her last name used, does not have to look far to know the difficulties first-home buyers are facing because none of her five adult children can afford a deposit to get on to the property ladder.

Her call to the Government followed the latest monthly Quotable Valuation (QV) House Price Index for November that showed residential property values nationally increased 6.4 per cent over the past 12 months. Values rose 3.6 per cent in the three months before November.

In Whangarei, the average house price in November was $499,955 or a 9.4 per cent increase on the previous 12 months.

Far North recorded $420,783— a 14.7 per cent increase— while values rose 13 per cent in Kaipara where the average price was $492,074. The national average value was $664,485.

Suzanne and her husband recently rented out their Tikipunga house and bought a bigger, three-bedroom property with a rumpus and an ensuite in Kamo for more than $500,000.

She bought her first home in Tikipunga nearly three decades ago at the age of 21.

"It cost me $60,000 and I put in a deposit of $3000 but I bought the house through a loan with Housing Corporation. Without them I wouldn't have been able to buy.

"Today first-home buyers are further priced out of the market and I think they need more government support either through lessening the deposit required or through a contribution towards their deposit or interest-free loan."

She said higher rents further compounded the problem.

The Reserve Bank is to ease the loan-to-value (LVR) restrictions on home buyers and property investors from January next year, which is expected to provide some help to first-home buyers.

Paul Beazley of LJ Hooker in Whangarei said restrictions placed on first-home buyers may need to be lifted if house prices kept creeping up albeit slowly.

Currently, first-home buyers in provincial areas like Northland who used their Kiwisaver and Homestart grant to get on to the property ladder can only buy a house worth a maximum of $400,000.

The threshold for new-builds is $450,000.

Mr Beazley said even a land and house package in Whangarei cost between $600,000 and $700,000.

Population growth and affordable houses compared with bigger cities still made Whangarei an attractive prospect for owner-occupier or investment properties, he said.

The residential property market in Whangarei is as strong now as it was before the election but over the past 10 years, traditionally the market is strong during late spring, summer and leading into autumn.

"If the Reserve Bank starts taking the pressure off LVR, we won't see a big surge in prices which we've seen in the last two years but house sales will still grow," Mr Beazley said.

The new Reserve Bank restrictions would increase the cap on banks from 10 per cent to 15 per cent for new mortgage lending to owner-occupiers.

Currently no more than 10 per cent of loans can go to owner-occupiers with a deposit of less than 20 per cent.

It will also ease the restrictions for investors. At the moment only 5 per cent of lending is to investors who have a deposit of less than 40 per cent.

That will alter slightly to allow those with deposits of less than 35 per cent for no more than 5 per cent of investor lending.