Northland sees highest average house price rise in 15 years

Northland's average house price increase of more than $150,000 in a year is the highest annual growth in 15 years. Photo / Michael Cunningham

Northland's average property values rose by a whopping $154,000 in just a year— the highest annual growth in at least 15 years— despite a couple of Covid lockdowns and a shortage of houses.

The OneRoof-Valocity House Value Index shows the average property value in Northland in the last 12 months grew by 24.8 per cent, with the average house price currently sitting at $775,000, although the market began tapering off in the three months to August.

As usual, Kaipara registered the biggest growth in the region of 31.7 per cent to sit at $844,000— up from $641,000 a year ago— and most of the increase is attributed to the booming housing market in Mangawhai.

A shed on an otherwise empty section overlooking the Mangawhai Heads camping ground and estuary on Olsen Ave was snapped up by an Aucklander for $1.45 million— $100,000 above the $1.35m reserve.

All six bidders were from Auckland.

The average house price in Whangārei is presently $832,000— an increase from $656,000 over the same period— while the Far North's housing market has been sluggish, recording an increase of $103,000 to sit at $663,000.

James Wilson of Valocity said the demand for properties in commutable locations around Northland has seen strong growth, coupled with historically low interest rates and a shortage of rental accommodation.

"What's also been happening, especially in Whangārei and in Kerikeri, is we've seen rental rates go up after been relatively level for some time. When that happened, it attracted investors after 12 to 15 months of staying away, when first home buyers stepped up to fill that gap.

"First home buyers buying off investors took those properties away from the rental market, thus pushing rental prices up. You'll see a surge in the housing market which will play catch-up. A secondary surge would be investors coming back as the OCR goes up," Wilson said.

This blue builder's lunch shed on an otherwise empty section in Mangawhai sold for $1.45 million to an Auckland buyer. Photo / Supplied

At the start of April, the Reserve Bank reimposed loan-to-value ratio (LVR) restrictions, which limit the amount of lending that can be done to both owner-occupiers and investors with relatively small deposits.

Most other owner-occupier buyers will require a 20 per cent deposit.

Northland's coastal properties, particularly in places like Mangawhai, still appealed to Aucklanders and overseas buyers after the Covid lockdown last year and that demand was expected to remain, Wilson said.

OneRoof editor Owen Vaughan said much of the growth in Northland took place towards
the end of last year and the first quarter of 2021 when interest rates and inventory levels were low.

However, the growth of the average property price started cooling in the three months to August, with an increase of just 3.9 per cent to $775,000, he said.

"We'll see what happens in the next three months and indications are that listings will go up and there'll be a surge in demand. Much of Northland's growth is attributed to the heavy lifting done in Whangārei and Kaipara.

"Typically, first home buyers will find the surge in the last 12 months has put them in a weakened position in that they have had to put up more in deposit, and due to lower inventory levels which meant more competition.

"Whangārei's average property price is creeping towards the $1m mark and that will be a psychological blow for first home buyers but is good news for existing homeowners, who will see a rise in the value of their properties," Vaughan said.

OneRoof editor Owen Vaughan expects new home listings in Northland to go up in the coming months. Photo / NZME

General manager of Harcourts in Whangārei, Paul Beazley, said the housing market across the country, including Northland, has seen growth of about 30 per cent in the past year due to a number of factors.

"A lack of stock which means buyers have to really compete for properties, and interest rates have been really low which has created an opportunity for people to get on to the property ladder.

"The growth in Whangārei has been right through the district, even in smaller towns like Onerahi, Hikurangi, Bream Bay and in Whangārei Heads. Enquiries still came through during the lockdown and now that we are in alert level 3, people are keen to view the properties over the next few days," Beazley said.

He said the lockdown had given people time to have a good look at properties online and he expected a surge in property listings during spring.

Beazley said the buyer demand over the last 12 months has been right across the board— first home buyers, investors, expatriates and Aucklanders.

OneRoof-Valocity figures show the average house value in New Zealand is close to hitting the $1m mark.

Of the regions, Waikato saw the biggest jump in prices in the three months to August, with its average property value up 6.1 per cent, rising from $821,000 to $871,000.

Also showing strong growth were Canterbury (up 5.5 per cent to $668,000), Bay of Plenty (up 5.5 per cent to $945,000), Tasman (up 5.3 per cent to $913,000) and Gisborne (up 5.1 per cent to $664,000).

Southland was the weakest performer, recording growth of just 2.6 per cent over the quarter for a new average property value of $472,000.

The most expensive residential properties are typically at Langs Beach, Mangawhai, Kerikeri, Whangārei Heads and the Bay of Islands.