A small Northland town has registered a 39 per cent leap in median residential property prices — the second highest increase throughout the country — in just one year.

Figures released by OneRoof shows Kawakawa experienced a 38.6 per cent rise, behind Mangakino in Waikato (41.5 per cent), while another Northland town, Kaikohe, saw the ninth biggest fall (-2.9 per cent) during the same period.

The current median price in Kawakawa is $280,000 compared with $202,000 in October last year and $127,000 three years ago.

Figures show there were 31 houses sold in Kawakawa in the 12 months to the end of October with the maximum sale price of $600,000.

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OneRoof editor Owen Vaughan said even in the three months to October this year, property prices in Kawakawa rose 12 per cent which he described as a "big hike" for such a small area.

It showed the popularity of the Northland housing market, he said, with people opting for its less busy lifestyle now that the region was better linked by infrastructure, such as fast broadband, with bigger centres such as Auckland.

"In the last three years and even between 2013 and 2016, Northland and especially Whangārei has really caught up with higher value markets and you're still seeing double digit growth, which is expected to stay because the Northland market is still affordable."

"The three-year change has been between 20 per cent and 40 per cent which shows good, rapid growth. People are also moving and buying in Whangārei which has really fuelled the Northland market," Vaughan said.

The biggest year-on-year median price rise in Northland was 14.9 per cent at Langs Beach which, as of November 1, had the highest median price value in the region at $1.4m.

Vaughan said it came as no surprise as Langs Beach was a high value suburb in
Northland because of its ocean views.

The next best was the suburb of Woodhill in Whangārei where the median price jumped 13.6 per cent, from $385,000 to $437,500 followed by Kamo (12.4 per cent), and Kiripaka (12 per cent).

Northland suburbs that fell in values were Mangapai and surrounding areas (-7.3 per cent) from $590,000 down to $547,000 and Kauri (-6.2 per cent) from $742,000 to $696,000.

Vaughan said the recently announced changes in mortgage rates would likely fuel house-buying activity and give homeowners in Northland more confidence about making a step up.

"The flipside is as properties values in Tauranga and Hamilton rise, rich Aucklanders will buy in Northland which means locals will find it harder to get on to the property ladder," he said.

Following Langs Beach in terms of the highest median house prices in Whangārei as of November 1 was Tutukaka ($1m), Matapouri ($997,000), Whananaki ($870,000) and Glenbervie ($833,000).

There were 1185 house sales throughout Whangārei in the past 12 months, with the highest sale price $2m.

Read the full OneRoof property report here.

Lifelong Kawakawa resident Johnson Davis said he hadn't realised the local real estate market had taken off to that extent, but it did reflect the town's thriving economy.

''Look at the main street, there's not a single empty shop. I just didn't know it was having such an effect on housing as well.''

The town's drawcards included its location at the gateway to the Bay of Islands, the vintage railway, the Hundertwasser toilets, and the soon-to-be-built Hundertwasser-themed visitors centre.

Davis, who chairs the Bay of Islands Vintage Railway Trust, said the town had been forced to re-invent itself following the closure of traditional industries and, more recently, the downsizing of the council offices and hospital. Those efforts were now starting to pay off, he said.

Alongside the real estate boom, Kawakawa has seen a series of major investments in recent years.

The district health board spent about $14m rebuilding Bay of Islands Hospital with the Government just last month committing another $7m to a new primary health centre.

In October, Bay of Islands College opened a new $2.7m gym while in September a project by the Hundertwasser Park Charitable Trust and local iwi Ngāti Hine to build a cultural hub and visitors' centre called Te Hononga received $2.4m from the Provincial Growth Fund.

An application for a much larger sum from the fund is pending to re-open the Kawakawa-Opua railway line, complete with a new station and a second steam train, as well as a new cycle trail between the two towns.


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