The housing market boom has irrevocably changed the face of Whangārei, turning previously affordable suburbs into no-go areas for first home buyers.
New analysis of house price inflation between January 2020 and January 2022 shows an explosion in the overall number of New Zealand suburbs with an average property value of $1 million-plus, from 298 to 894.
The boom has had a dramatic effect on Whangārei, with the number of suburbs with an average property value of $1m or above in the territorial authority jumping from two to 29 over the 24-month period.
The research, carried out by NZME-owned property listing site OneRoof.co.nz and its data partner, Valocity and published in the OneRoof Property Report, also shows a crunch at the bottom end of the market.
The number of Whangārei suburbs with an average property value of less than $500,000 dropped from 16 to just one.
OneRoof editor Owen Vaughan said the research highlighted the growing inequality in Whangārei's housing market, where the overall average property value grew 49 per cent over the two-year period from $639,000 to $953,000.
"Back in January 2020, just before Covid struck and interest rates were slashed, just two suburbs - Langs Beach and Taiharuru - had an average property value of more than $1m.
''After two years of cheap credit and rising fear of missing out (FOMO) among buyers, the number has jumped to 29, which means in almost half the district the majority of buyers would have to stretch themselves to limits of affordability to buy a home," Vaughan said.
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Advertise with NZME.Langs Beach is Northland's only suburb with an average property price of more than $2 million at $2,15,6000.
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The Whangārei suburb of Ōtangarei, traditionally a cheaper suburb, saw average property prices rise 59.1 per cent, from $247,000 to $393,000 over the past two years.
At the same time, Raumanga has seen its average property value rise 53 per cent from $364,000 to $557,000; Tikipunga by 46.5 per cent from $470,000 to $689,000 and Hikurangi 45.8 per cent from $436,000 to $636,000.
These suburbs were traditionally the domain of first home buyers, but increases like that will force them out of the reach for many making their first foray into the property market.
The research also showed disruptions in the country's seven major metros.
The city most affected by the boom was Wellington, where the share of suburbs with an average property value of less than $1m fell from 78 per cent (44 suburbs) in January 2020 to 12 per cent (seven suburbs) in January 2022.
Tauranga saw the next biggest fall in sub-$1m suburbs: 86 per cent of the city (20 suburbs) was in the price bracket in 2020 but by 2022 that had fallen to 34 per cent, 8 suburbs.
The number of sub-$1m suburbs in Auckland fell from 123 (44 per cent) to 26 (9 per cent) over the same period, while the number of suburbs in the $1.5m-plus band exploded from 57 to 149.
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Advertise with NZME.The least changed by the boom was Dunedin, where the overall average property value grew 33.4 per cent over the two-year period from $568,000 to $758,000 and the number of sub-$1m suburbs fell 14 per cent, Vaughan said.
Valocity head of research Wayne Shum said the growth over the two-year period was fuelled by record-low mortgage rates and the suspension of the loan to value ratio restrictions after Covid-19 hit in March 2020.
"The rate of house price growth over the last two years was highly unusual. Before Covid, it had taken New Zealand's property market almost five years to achieve the same amount of value growth, with Canterbury and West Coast taking more than a decade to match their growth levels."
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However, Shum said, the housing market was unlikely to see the same amount of growth in 2022.
"As inflation begins to bite and mortgage rate rises, we are likely to see the growth rate moderate to level seen pre-Covid. And expect to see some value softening in some locations or within some property types."
