Whangārei nurse Kenneth Alo bought this house in Kamo for just under $400,000 in the middle of last year after moving from Auckland. Photo / Michael Cunningham
Whangārei nurse Kenneth Alo bought this house in Kamo for just under $400,000 in the middle of last year after moving from Auckland. Photo / Michael Cunningham
Whangārei house prices have taken their first dive in six years as house prices outstrip local wage growth.
The latest figures show the average value of a house in Whangarei has fallen 1.4 per cent - the only provincial centre in the country to show a drop.
It follows sixyears of growth during which property values have risen about 60 per cent.
Over roughly the same period, the average household income has risen 32 per cent to $94,550.
The housing figures come from the September 2019 CoreLogic QV House Price Index.
Northland Property Investors' Association president Mike Tasker said the latest drop in values was "bloody surprising", given the burgeoning housing market over the past few years.
"Things appear to be moving. You still see 'for sale' signs on the side of the road and a couple of weeks later, 'sold' signs go up. However, CoreLogic's comment about low wages rings true because the wages here are a lot lower than other centres."
A drop in interest rates and house values would lead to better affordability, especially for first-home buyers, he said.
Tasker said it may also be a good opportunity for property investors to return to the market because rents were not going down like house prices.
Figures show 1025 residential properties were sold in Whangārei in the year to September compared with 1090 for the same period the previous year - a drop of 65.
The highest number of sales occurred in Kamo, where 198 houses were sold in the 12 months to September, followed by Tikipunga (116), and Onerahi (105).
Whangārei nurse Kenneth Alo bought a three-bedroom weatherboard house in Kamo for $395,000 in June last year against a valuation of $255,000 after renting in Raumanga for an year.
The house has changed ownership 12 times since 1982 when it was bought for $59,000 against a valuation of $27,000.
"I was looking to buy around the $400,000 mark but couldn't find any up to that price that was a bit tidier. Am happy with what I got at the time. The neighbours are good.
"I feel house prices are going to pick up next year after being stagnant in the last year, especially in Auckland," he said.
House prices in Whangārei have taken a hit but the market is predicted to bounce back sooner rather than later. Photo / John Stone
OneRoof editor Owen Vaughan said separate housing market figures from the company and its data partner Valocity supported indications of a slow-down in Whangārei in the last quarter.
"This could be due to the market there hitting a price ceiling as affordability issues that have plagued the Auckland market spread north.
"The bounce back in the Auckland market, and the rise in listings there, could also be a future drag on prices as Auckland buyers turn away from options north of Wellsford."
Vaughan said homeowners in Whangārei should temper any thoughts of a collapse in the market though, because house values have risen 78 per cent in the past five years and were bound to start levelling off at some point.
Paul Beazley from Eves real estate in Whangārei said CoreLogic figures said Whangārei prices had grown off a surge in the Auckland market since 2014 and from people moving north.
Auckland values had also stagnated then slipped but had been shown to be recovering and growing.
"It was on the cards that the prices would level off for a period but I don't think we will see a drop, and I do think there is still a shortage of stock which will keep the prices firm.
"I think we are back to a normal real estate market. Low interest rates, availability of stock, and a growing population will contribute to a strong market over the next year," Beazley said.
Outside New Zealand's largest cities, many provincial centres showed strong growth.
Hastings gained the most at 18.7 per cent, followed by Gisborne (17.7 per cent), Whanganui (15.8 per cent), Palmerston North and Invercargill (13.6 per cent), Rotorua (13.4 per cent), Napier (8.7 per cent), Kapiti Coast (8.3 per cent), Nelson (7.1 per cent), New Plymouth (6.1 per cent), and Queenstown (3.1 per cent).
CoreLogic head of research Nick Goodall said the negative result for Whangārei highlighted that despite record low interest rates and a generally positive outlook, not all markets would continue to grow forever.
"While many analysts, including ourselves, are expecting nationwide growth to increase next year, there will be varying degrees of growth around the country."
