Northland property values: Kaipara bucking the trend on property front

Vernon Woods has seen a steady trickle of people into Dargaville and surrounding areas where houses are much cheaper than bigger regional centres. Photo / Michael Cunningham

Kaipara is bucking the trend in a somewhat stagnant housing market in Northland as first-home buyers and investors adopt a cautious approach post-Covid lockdown.

Properties in areas in and around Dargaville are being snapped up faster than in Whangārei and Far North districts, which had experienced negative growth since March 25, figures from OneRoof show.

Northland experienced the second-highest negative growth in New Zealand of -2.1 per cent, behind Otago which recorded -3.4 per cent since New Zealand went into lockdown. Real estate agents say that was not unusual.

Northland's median house price sits at $550,000.

Since the lockdown, Whangārei's residential house sales dropped by 3.2 per cent, Far North 0.2 per cent but Kaipara registered a growth of 1.5 per cent.

Real estate experts believe September would be the month to watch as that was when wage subsidy and mortgage deferral schemes come to an end, which could put pressure on some homeowners to sell.

James Wilson, director of valuation at OneRoof's data partner Valocity, said a greater number of first-home buyers, rather than investors, had been active in Kaipara since March 25.

"The price point is that it's very much affordable in some locations in Kaipara but, for Northland as a whole, the days of double-digit capital growth will no longer be the case for some time.

"First-home buyers and investors have adopted a very cautious mindset and are looking at a longer holding pattern, which is not necessarily a bad move but it can impact on confidence," he said.

Manager of Anzac Theatre in Dargaville, Vernon Woods, said not a week went by when he didn't see new people who had bought houses in the area.

"There's been a steady trickle of people moving to Dargaville and surrounding areas, which is much more manageable. They are not all from Auckland and not just older people but all sorts, including a lot of younger families.

"They find work on farms and can usually afford to buy a home compared to living week-to-week in a city which is so expensive. The properties in semi-rural areas are cheap and there really is no comparison with property prices in Dargaville and those in Auckland," Woods said.

He said parts of Kaipara had become attractive for Indian and Filipino farm workers over the years.

Figures on the number of house sales specifically during the lockdown period aren't available as the numbers were very low in the absence of open homes and new listings.

However, since the beginning of this year until mid-June, 507 houses were sold in Whangārei, 274 in the Far North and 148 in Kaipara.

Comparative figures for a similar period last year were unavailable.

As usual, Lang's Beach notched the highest median price in Northland at $1.55m, followed by Taiharuru $1.19m, and Rawhiti $1.09m. There are now five suburbs in Northland that have a median value above $1m, for the first time.

Editor of OneRoof.co.nz, Owen Vaughan, said Northland's high dependency on tourism and low socio-economic living impacted on its property market during volatile periods like Covid.

"There's been a general retreat from the market. Investors are taking a big step back and first-home buyers aren't really filling in the gap and that's why markets that are under pressure at the moment like Northland will be exposed going forward."

He said the opening of domestic tourism would be of little help to Northland as local visitors did not spend anywhere near as much as overseas tourists.

Paul Beazley, general manager of Eves in Whangārei, said prices have remained at February and March levels, and while sales numbers were down, that was to be expected.

"We may see the impact on price once mortgage deferments are finished, subsidies are at an end and the effect of unemployment levels come home to roost, which is likely to be felt in spring.

"There may be some forced sales, but I don't think we'll see too many stressed sales," Beazley said.

Paul Beazley of Eves Real Estate Whangārei said there may be some forced sales when mortgage deferments were finished. Photo / John Stone

Mike Beazley, business owner of Harcourts Whangārei, said the end of the wage subsidy and mortgage deferral schemes "could put real pressure on some owners as to whether they could continue with their mortgages".

"Presently the demand for good property is exceeding supply. However, it would not be unreasonable to say there could be an easing of prices in the coming months."

Tony Grindle, general manager for Bayleys Northland, said the market has a lot of qualified, cashed-up buyers who competed for a dwindling supply of stock.

Although a lack of sales over April and May did have an impact, he said Northlanders have learnt to not stress about things outside of their control.

New Zealand's kumara capital recorded the strongest growth in house sales throughout Northland during the lockdown. Photo / Michael Cunningham

Martin Dear, manager of Barfoot & Thompson in Whangārei, said Northland was a region of choice and the lockdown has allowed people to refocus on their future.

"I think we will continue to see demand and development and this will drive growth in the market."

The highest settled sale since the start of 2020 was $7m paid to a property on Okiato, in the Bay of Islands.

Langs Beach has the highest median house price in Northland of $1.5m. Photo / John Stone

There are five suburbs in Northland with median house prices of more than $1m.

They are:
Lang's Beach - $1.55m
Taiharuru - $1.19m
Rawhiti - $1.09m
Parekura Bay - $1.042m
Waikare - $1.02m.

A glance at Northland's property market:
* Suburb with the biggest increase in value since March 25 - Kensington 7.90 per cent
* Highest median price - Lang's Beach $1.5m
* Lowest median price - Te Hapua $90,000
* Number of residential properties sold since the start of the year - 929