A gloomy autumn housing market has had the opposite effect on Northland which enjoyed a lift in house prices— one of three regions that experienced modest growth despite downward pressure on sales elsewhere.

According to
the latest OneRoof-Valocity Index, New Zealand’s housing market headed into winter weakened as property values continued to slide in most regions except Northland, Otago and the West Coast.

All three regions enjoyed lifts in their average property value in the three months to the end of May, with West Coast recording the highest quarterly value growth, at 2.9 per cent.

Northland’s average property value rose 0.5 per cent ($4000) in the last three months to $848,000. By contrast, New Zealand’s average property value fell 2.3 per cent ($22,000) to $950,000 over the same period.

Whangārei-based electricity design estimator Mukesh Naidu built a three-bedroom house in Kamo and moved in a month ago. He and his wife Ashishna had always wanted to build their dream home and got an opportunity when interest rates were low about a year ago.

They moved from Fiji in 2018.

“We looked at a number of options, even existing homes, looked at various subdivisions and went to open homes, to test the market and see where we fit in,” Naidu said.

“We wanted to build away from town but not too far away. When we purchased the land last year, the interest rates were low and banks required only a 10 per cent deposit so building a house became quite doable for us.”

Despite talks of a slow housing market, Naidu said prices were holding up well in Whangārei.

Mortgage broker Sandeep Maisuriya, of Zest Brokers in Whangārei, said the cost of living impacted everyone and families were looking at cuts across the board, including affordable mortgage rates.

“I wouldn’t say the prices have come down a lot but there’s definitely more properties in the $550,000 to $750,000 price bracket whereas before they were in the $650,000 to $850,000 and that’s why you’ll see more first-home buyers getting on to the property ladder,” he said.

Maisuriya said home buyers and owners opted for a two to three-year fixed interest rate because most banks advertised for a three-year fixed interest rate of 5.99 per cent.

The only investors in the market were looking at snapping up investment properties in the $500,000 price range, he said.

Maisuriya said auction sales were not doing well two to three months ago but were now.

OneRoof editor Owen Vaughan said Northland’s growth was underpinned by property value lifts in the Far North (up 1.9 per cent to $803,000 in the last three months) and Kaipara (up 0.5 per cent to $934,000).

The OneRoof-Valocity figures also showed the rate of decline had slowed in Whangārei, with the city’s average property value down only 0.6 per cent ($5000) to $854,000 over the quarter.

Vaughan said the revival in Northland’s fortunes could be seen at a suburb level.

“Of the 67 suburbs with 20 or more settled sales in the last 12 months, more than a third recorded value growth over the quarter, with three – Russell, Karikari Peninsula and Ahipara – enjoying growth of more than 4 per cent.”

Although the downturn has wiped $77,000 off of Northland’s average property value, he said it was much less than the nationwide figure of $148,000 and Auckland’s $289,000 fall from peak.

He said Northland homeowners were still up on pre-Covid times, with the region’s average property value $229,000 above where it was in March 2020.

However, there were challenges in the region’s market as sales volumes for the quarter were down 41.39 per cent year-on-year and new listings were down 21.2 per cent year-on-year.

Vaughan said first home buyer’s share of purchases has also declined, down from 43.3 per cent in March to 35.4 per cent in April. However, investors and multi-homeowners have returned to the market, albeit with lower overall volumes.

The number of settled sales in Northland in the last 12 months was 3047. Of those, 1639 were in Whangārei, 932 in the Far North and 476 in Kaipara. Tikipunga with 117 settled sales over the last 12 months was the best performing suburb in Northland. New listings in Northland were down 21.2 per cent year-on-year.

“The lack of competition from investors and the news that rates have peaked suggest this is as about as good as it is going to get for first-home buyers,” Vaughan said.

The best-performing suburb in Northland in the three months to May was Russell which enjoyed a 7 per cent increase in house sales. The average property value in Russell sits at $1.6 million.

Te Tai Tokerau’s housing market at a glance:

Northland’s average property value rose by 0.5 per cent in the last three months

Russell was the best-performing suburb with a 7 per cent increase in sales

The number of settled sales in Northland in the last 12 months was 3047

Tikipunga with 117 settled sales over the last 12 months was the best performing suburb in Northland.