Far North house prices slump 5.4pc

The property values in the Far North have fallen 5.4 per cent

Whangarei and Kaipara property values have risen in the past year, but new figures reveal the Far North is lagging behind.

Kaipara values led the way with a 6.2 per cent increase in the year to December to an average value of $326,429, followed by Whangarei which recorded a 2.7 per cent increase to $334,757, according to state valuer Quotable Value.

But the Far North suffered a 5.4 per cent slump, with average values dropping to $300,874. Across the region, values remain well down on the 2007 market peak, the figures show.

In contrast, New Zealand property values rose at a 10 per cent annual pace to hit an average current value of $466,022.

In the past three months nationwide values rose 3 per cent and are now 12.5 per cent above the 2007 market peak.

Barfoot and Thompson Whangarei branch manager Martin Dear said there had been a lift in the market over the New Year. Properties upwards of $400,000 had been particularly in demand, or those with a "wow factor".

Whangarei was seeing growth and slow moving housing stock was starting to sell, he said. He was confident 2014 would be a more positive year for the market.

"I think people are coming in and actually realising Northland's a great place to be," Mr Dear said.

QV research director Jonno Ingerson said the provincial centres showed less of a clear trend over 2013 than the main centres.

"Apart from Wanganui and Queenstown, all the provincial centres increased during 2013, but the increases were less than 5 per cent."

Most centres remained a few per cent below the 2007 peak, while Whangarei, Gisborne and Wanganui were more than 15 per cent below.

"Compared to 2012, sales volumes dropped in many of the provincial centres by a few per cent."

He predicted the Reserve Bank lending restrictions on high-risk, low-deposit mortgage loans would negatively affect property turnover and values this year. "Outside of Auckland and Canterbury there isn't the same imbalance between supply and demand. There generally aren't multiple purchasers vying for the same property, so the [Reserve Bank] speed limits are likely to significantly decrease demand and therefore prices."

An expected interest rates hike later this year would increase the cost of servicing mortgages, which would lead to people borrowing less and therefore offering less for properties, he said.

However, surging consumer and business confidence, particularly in the main centres, could counter those influences.

Overall, nationwide values were likely to increase modestly this year, but mainly as a result of the surging Auckland market.