Sales of rentals drive up house prices

Photo / Naomi Driver

An increase in the sale of rental properties is behind rising house prices in the district.

The latest Quotation Value (QV) house price index shows the average property price in Whangarei increased by 14.6 per cent over the past 12 months, from $341,855 in February last year to $391,863.

Property values in Kaipara also increased over the same period. The district registered a hike of 8.6 per cent — from $345,996 to $375,875 — while values in the Far North rose by 8.2 per cent to $330,904.

Paul Beazley of LJ Hooker Whangarei said the increased sale of rental properties, coupled with an increase in migration, were pushing house prices up in Northland.

"It's true that more people are coming to Whangarei and Northland than those leaving. There's a lot of rental properties that are bought by people who then live in them.

"This has resulted in less rental properties available in Whangarei. In terms of population growth, a lot of retirees plus young families wanting to run little businesses are looking for properties everywhere."

Mr Beazley said rising prices in Kaipara were linked to a strong demand for coastal properties in Mangawhai, which was also an easy commute for people to work in areas such as the North Shore.

He said new houses were being built in Whangarei to cope with demand but, with prices in the $400,000-plus bracket, they were unaffordable for new home buyers.

Mr Beazley said an influx of Aucklanders, low interest rates, and a demand for houses all contributed to a rise in property prices in Northland since the beginning of last year.

In Ruakaka and One Tree Point, the demand for lifestyle properties of between one and 10 acres was strong.

Mr Beazley said the number of rental properties his company sold recently could not be revealed as it was market sensitive. "I can say that the level of rental property sales through our agency last year was close to double the previous year."

The capital value of Whangarei's properties has risen by almost 10 per cent in the past three years, with the district's 40,328 properties now worth $19 billion.

QV re-values properties every three years and, after the latest valuation in September, the district is now worth $19,079,878,510 on capital value.

Increase in house prices by district:

Whangarei:
Feb 2012: $328,760
Feb 2016: $391,863
Kaipara
Feb 2012: $311,762
Feb 2016: $375,875
Far North
Feb 2012: $290,498
Feb 2012: $330,904