Median house prices hit record in Northland

Tony Grindle, of Bayleys in Whangarei, said Aucklanders snapping up lifestyle properties in Mangawhai and Kaipara Harbour are pushing houses prices up in Kaipara. Photo/Supplied

Northland's median house price has bounced back to not only register a record high but the number of houses being sold is creeping back up.

The Real Institute of New Zealand's July national house data shows the median house price in Northland at $455,000, up from $425,000 in June and $370,000 in July last year.

As house sales volume throughout the country collapsed by a quarter in the past year, REINZ has made a desperate call for an end to the Reserve Bank's stringent lending restrictions for first-time buyers.

Kaipara shows the biggest jump within a month, from $340,000 in June to $520,000 in July or a 53 per cent increase, and one real estate leader said Aucklanders snapping up mostly lifestyle properties were driving both sale numbers and prices up.

Bayleys Northland general manager Tony Grindle said his staff were fielding a lot of inquiries for lifestyle properties, particularly around Kaipara Harbour and Mangawhai.

"Those sort of places and properties appeal to Aucklanders because they can buy them 30 per cent cheaper there than in places like Whangarei.''

He said those Aucklanders were not first-home buyers so the loan-to-value (LVR) restrictions did not really affect them.

While the current trend would regrettably make it harder for first-home buyers in Kaipara to get on to the property ladder, Mr Grindle said a busy real estate market in the district
brought positive spinoffs such as business developments.

"If we get a lot more listings in summer, that can have a downward pressure on prices."

REINZ figures show the number of houses sold in Kaipara increased from 16 in June to 20 in July, in Whangarei from 90 to 112 over the same period.

However, the numbers were down in the Far North where just 58 houses were sold in July compared with 77 the previous month.

In terms of the median house prices in July, Whangarei jumped from $407,000 to $452,000 and the Far North from $445,000 to $455,000.

REINZ chief executive Bindi Norwell said LVR restrictions have done their job of slowing the market but now it seemed they were acting as a handbrake hence a call for LVRs to be reviewed for first-time buyers.

But in keeping the Official Cash Rate steady this week, the Reserve Bank reiterated its LVR stance and shows no sign of relaxing the policy to restrict bank lending.

"House price inflation continues to moderate due to loan-to-value ratio restrictions, affordability constraints, and a tightening in credit conditions. This moderation is expected to persist, although there remains a risk of resurgence in prices given continued strong population growth and resource constraints in the construction sector," the bank said.