Northland housing market cooling with 'cheap as chips' properties for sale

Real estate agent Jay Prestt from Harcourts Kerikeri said getting a bargain in the current housing market is still possible if you're willing to compromise. Photo / Jenny Ling

More houses for sale mixed with a cooling Northland market means there are still ample opportunities for first-home buyers to grab a bargain.

The latest housing data shows while Northland property prices have seen a significant increase over the last year, there has been a drop in some towns over the last three months as economic uncertainty dampens demand.

There are currently several three-bedroom houses listed on TradeMe for $300,000 or less.

They include a 1950s home on an 819sqm section in Ngāwhā Springs priced at $299,000.

There is also a 70sqm house in Kaikohe going for a mere $269,000 and a "cheap as chips" two-bedroom house in Hikurangi listed for offers over $310,000.

There are also plenty of three-bedroom houses on the market in Kaitāia, Kaikohe, Whangārei and Kawakawa priced under $400,000.

OneRoof editor Owen Vaughan said the housing market was "slowing, without a doubt".

"Some regions have seen a quicker slowdown than others, but Northland, from our figures, has generally weathered it better than Auckland or Wellington.

Property values in Northland were still growing, Vaughan said, with the average property value sitting at $920,000.

Kaipara is still doing really well, with Mangawhai and Mangawhai Heads still experiencing strong growth, Vaughan said.

Real estate agent Jay Prestt from Harcourts Kerikeri just sold a 1920s solid hardwood home on a 1100 sqm section in Moerewa for $289,500.

People from further afield such as Whangārei were interested in the property, which was snapped up by a first-home buyer, an Opua woman in her 30s.

Prestt said there were still opportunities to become homeowners if people were willing to compromise and put in some elbow grease.

"There are a lot of working opportunities in Kerikeri; people are working here but can't afford to live in the area.

"So people are taking their search to a wider area.

"In terms of the Moerewa house, it's an older property, it has been tenanted for a long time so it does need money spent on it. But it's a good, solid home.

"It's a good way to get into the property market...if you're willing to put in the work."

Location is important, Prestt said, but "it's important for different reasons for different people".

"It certainly plays a part but people are willing to drive if the price is right.

"Moerewa is a step closer to Whangārei and it's central to Paihia, Kaikohe and Kerikeri.

"It's well located, there are good services and decent schooling.

"It gets a bad rap - but it's a nice community."

REINZ chief executive Jen Baird said the Northland housing market has been cooling off since November following two years of exceptional Covid-19 activity. Photo / Fiona Goodall

The latest data from the Real Estate Institute of New Zealand shows Northland median house prices rose from $651,500 in March 2021 to $800,000 in March 2022, an increase of $23 per cent.

But while property prices are continuing to climb in some parts of Northland, others have experienced a drop in the three months from December 2021 to March 2022.

Paihia dropped 14 per cent, from $747,000 in December to $644,000 in March.

Kaitāia saw a decrease of 10 per cent, with house prices going from $400,000 to $360,000 over the same period.

Kaikohe dropped from $378,000 to $355,000, down six per cent, while Kerikeri saw a slight decrease of one per cent, down from $930,000 to $920,000.

REINZ chief executive Jen Baird said Northland was following the national trend and cooling off following two years of exceptional activity.

The "supply and demand equation" has changed, Baird said, with more properties coming onto the market.

"There's twice as much on the market now as there was through mid last year.

"There's a lot more choice.

"On the demand side, the increasing interest rates and changes to the triple CFA have made it harder to get finance lined up for buyers. And general economic uncertainty has dampened demand.

"People were really rushing six months ago but that pace has come out of the market.

"If you are a first-home buyer looking at that cheaper end in the market, you're in a really good position right now because there are more options."

Baird said the location depended on personal goals.

"The real estate adage 'location location location' is around for a reason; it's important to people for lots of reasons, like proximity to work and schools.

"But it comes down to where you want to be and what you're trying to achieve."

There are factors to consider when buying a cheaper house in an unfamiliar area, Baird said.

Her advice is "always do your research".

"If you don't know an area well, spend time there, look at all the houses for sale and get a feel for the place.

"Go to the local café and fish and chip shop and get a sense of what it feels like to be there.

"Talk to real estate agents; they are active in the community, and know what's happening in the property space.

"And get a builders' report and a LIM, and understand what you're buying."

Mortgage advisor Karen Latimer, from Mortgage Lab, said rising interest rates and inflation were still making it difficult for house buyers. Photo / supply

Whangārei-based mortgage adviser Karen Latimer, from Mortgage Lab, said although the market was cooling and there is more supply, rising interest rates and inflation were still making it difficult.

"It's becoming harder for everyone.

"It's harder for those with low deposits and it takes more time to get finance.

"People are more hesitant to buy a new build because of the escalating cost of materials and delays.

"In saying that, some people just want to get into a home and don't want to be paying rent."

First-home buyers can get away with a 10 per cent deposit if they have a strong application, Latimer said.

There are also first-home grants through Kāinga Ora of up to $5000 for an existing property and up to $10,000 for a new build for Northland properties under the price cap of $400,000.

Location was a personal choice, she said, but it's best to check with the lender whether it's somewhere they will lend against.

"If it's outside the main location, they may not want to lend there, or they may want to lend a lesser ratio, especially in the lower deposit situation."