Mangawhai, where housing prices have been increasing in the past year. Photo / Tania Whyte
New housing data shows Northland might be bucking the trend when it comes to decreasing house prices, but the impact on buyer’s confidence following Cyclone Gabrielle remains unknown.
Aotearoa’s property prices continued on a downward
trend last month, starting off the year with a record-breaking asking price fall of 8 per cent year-on-year in January, according to the latest Trade Me Property Price Index.
However, Trade Me property sales director Gavin Lloyd said not every region saw prices cool off in January, including Northland.
“In the North Island, the Northland (+5 per cent), Taranaki (+3 per cent), and Waikato (+1 per cent) regions all saw their average asking prices increase year-on-year,” Lloyd said.
OneRoof editor Owen Vaughan said while some areas may have seen an increase in asking prices for property, that doesn’t always reflect the actual selling price.
“The trend line for the New Zealand home market is downwards. The average property value in Northland from our figures is down year-on-year by 8 per cent to $844,000.”
Time will likely tell how the damage from Cyclone Gabrielle this month will impact the property market going forward.
“It’s very hard to get a handle on where the market is heading.
“I think you’re going to find some markets that are high-value, markets that are attractive to Auckland … investors like Mangawhai and Langs Beach. Those higher-value beach markets will probably now take a hit from the storms.”
Coastal properties at Langs Beach and the neighbouring Mangawhai Heads continue to attract skyrocketing prices for residential properties in Northland, the Advocate reported in December.
One of the biggest sales was a $5.6 million property in Langs Beach, sold in February 2022.
“But, the strength of those markets is that the infrastructure that’s been laid down to increase the speed of journey times between Auckland and those places kind of makes those properties more attractive.
“But the questions that’ll be on buyers’ minds at the moment will be, has your house been flooded? And vendors need to prepare for that.”
“For Northland, and as for much of the other regions that have been hit really hard by the recent extreme weather events, their focus will be on rebuilding their communities.”
Vaughan said in the aftermath of the cyclone there might be an increase in pressure in terms of sale activity, especially in the rental market.
“That might actually put an extra bit of pressure, at least in the short-term, on the housing market.
“People who have been displaced will need to find temporary accommodation. That might be putting pressure on the rental market, or maybe also putting pressure on some kind of sections of the market as people look to buy a temporary solution while there are properties being rebuilt or been demolished.”
While the housing market has been termed a “buyer’s market” with prices decreasing, housing affordability still remains out of reach for a lot of Northlanders.
“Low sales means kind of low activity, and a certain amount of buyers are kind of holding off.”
Harcourts real estate agent Paul Beazley said he’d seen a slowdown in the number of sales and a bit of uncertainty about pricing in the marketplace recently.
“I think what’s happened over the last sort of three to six months, anyway, is that the markets been uncertain, mainly because of interest rates increasing the cost of living.
“I think putting on top of that the fact that we’ve had these storms, it will make some people nervous, for sure.”
Beazley said he thinks that buyers will be more cautious about property and location after the cyclone, but he wasn’t sure that would last long.
“I think it’ll be short-term. I think once we get a month or six weeks out from the storm period we’ve had – people think it will start to settle down a little bit.
“But if you take Covid as an example, you know, everybody imagined that the market would just wind down and crash, almost, but it went completely in the opposite direction,” Beazley said.
Kiwis are pretty resilient, Beazley said, so he thinks it’s possible that things could settle down rather quickly in the housing market post-cyclone.