An explosion in $1 million suburbs in Whangārei and continued growth in Kaipara have pushed Northland's average house price to more than $781,000 in just one year.
The latest OneRoof Property Report out today shows a 360 per cent increase in $1m houses in Whangārei — from just five in September 2020 to 23 a year later— whereas the number of suburbs with properties for less than $500,000 have shrunk.
A deposit of $156,200 is presently required to buy a house in Northland, an increase of $31,200 in the last 12 months.
Whangārei also has its first $2m suburb, at Langs Beach.
OneRoof editor Owen Vaughan said by the end of this year, or early next year, probably two-thirds of Whangārei houses would top the $1m mark.
"First home buyers are active in the market, with low interest rates that have created more competition. A year ago, houses that were in the $800,000 to $900,000 price range are now over $1m. There are 15 suburbs where houses are over the $800,000 mark.
"Whangārei has probably been undervalued for a little while, despite its location and climate. Much of the activity is driven along Northland's east coast, which is becoming like Omaha, with rich listers owning holiday homes," Vaughan said.
The number of suburbs where one could buy a home for less than $500,000 has shrunk to three over the 12-month period.
Northland's average property value rose 25 per cent ($154,000) in the 12 months to September 15, just above Auckland's annual growth rate of 24.9 per cent but below NZ's
growth of 26.6 per cent.
Vaughan said the growth was driven by a surge in activity in Kaipara, which Aucklanders looking for holiday home escapes were increasingly viewing as commutable.
However, he said there were signs that the market was slowing in the region: value growth in the three months to September 15 was 3.2 per cent, down from the 5.73 per cent growth in the previous three-month period.
"In saying that, 3.2 per cent growth equates to an extra $24,000 on the price of a typical house in the region, and covers a near four-week period when the region was in a tight Covid lockdown and housing market activity was restricted.
Infometrics senior economist Brad Olsen said authorities should be looking at pre-fabricated houses and a bigger infrastructure rollout as a way of making residential properties more affordable in Northland.
"The challenge remains that if we are focused on demand we are playing Russian roulette with the housing market. When the music stops, there'll be fewer houses and less people who own them.
Residential consents in Northland went up 42 per cent in the year to June, compared with the previous season, so building activity has not slowed down, he said.
"There are a worrying number of young people who see the region as a great place to invest in but can't. An increase in interest rates is expected to limit the housing activity to
a degree but the market will still remain buoyant," Olsen said.
Kaipara is Northland's hottest housing market and most expensive, with the average property value reaching $853,000. Annual growth to September 15 was 31.2 per cent — above Auckland — but the three-month growth figure has slowed from 6.84 per cent to five per cent.
Whangārei's average property value has grown 26.4 per cent ($175,000) to $837,000 over the same period. Growth over the last three months has slowed to three per cent, down from 6.55 per cent over the previous three-month period.
With an average property value of $668,000, the Far North is Northland's cheapest district. Annual growth to September 15 was 19.3 per cent — the eighth lowest in New Zealand.
Kerikeri is the Far North district's hottest housing market. It's where the bulk of sales took place. There were 328 settled sales in the last 12 months, 20 per cent of the Far North total.
The town's average property value grew 6.9 per cent in the three months to September 15, to $992,000, up from 2.65 per cent over the previous three months.
Annual growth was 16.6 per cent ($141,000).
There were just three suburbs across Northland with an average house value of less than $500,000. They were Pipiwai ($486,000), Pakotai ($467,000) and