Whangārei is dragging the rest of Northland down on the property market slowdown, leading to more re-financing of loans and fewer properties being successfully sold at auctions.

Figures from the latest OneRoof Property Report out
today show Northland’s average property value falling 2.9 per cent to $893,000 in the September quarter and although that was still $103,000 up on a year ago, the pace of decline has increased since the region first slipped into negative growth territory in April.

Dragging the region down is Whangārei, where the average property value dropped 4.4 per cent ($43,000) over the quarter to $934,000.

Hesitancy among buyers, driven by rising interest rates, an inflation rate of more than 7 per cent and fears about the wider economy, was resulting in fewer sales, which in turn was putting downwards pressure on property values.

The decline in Northland is less than Greater Wellington (9.1 per cent), Nelson (5.9 per cent), Hawke’s Bay (5.2 per cent) and Bay of Plenty (4.4 per cent).

Of the 28 suburbs in Northland that had 20 or more settled sales over the past 12 months, only one, Tutukaka, registered value growth in the three months to the end of August – a healthy 3.2 per cent lift to $1.49m – but 11 suburbs fell harder than the territorial authority average.

Senior researcher at Valocity Wayne Shum said a higher interest rate, coupled with a traditional slower property market in winter, hampered first home buyers and investors alike.

“Late 2020, early 2021 deposit requirements were suspended and that saw people looking at buying investment properties in regional towns but interest rates shot up post-Covid which slowed down the market.

“After such a boom, a lot of sellers are taking time to adjust their prices. The demand is not there. A year ago, interest rates were around 3 per cent but they are now five to 5.3 per cent.

“Then you have the share market for Kiwisaver falling a bit this year. The high cost of living also impacted on the property market,” Shum said.

Bach sales, he said, were still going strong in Northland but that was a different market as those keen to buy baches usually owned other properties.

Northland’s star performers over the September quarter were Waipapa (up 1.2 per cent to $1.13m), Kaitaia (up 2.9 per cent to $468,000) and Pukenui (up 3.9 per cent to $791,000).

Pukenui registered the largest growth 25 at per cent and the current average property value sits at $791,000.

Kaipara’s average property value was down 2.4 per cent over the quarter to $983,000, with Te Kopuru leading the district’s slump with a value fall of 8.1 per cent to $512,000.

Mangawhai Heads narrowly escaped the winter cold spell, with its average property value down only 0.7 per cent over the quarter. The average property value in the area is nearly $1.5 million.

Northland’s most expensive suburb is Langs Beach (average property value of $2.39m) and its cheapest is Kaikohe (average property value of $385,000).

Mortgage broker Sandeep Maisuriya, of Zest Brokers in Whangārei, has seen a huge increase in inquiry from first home buyers, especially in the low deposit space in both Kāinga Ora and direct bank applications.

He said there have been success stories with buyers who were able to get into a property where they have struggled to get their offers accepted historically.

Auctions certainly have been impacted and there have been fewer properties being successfully sold at auctions, he said.

“Currently, there’s more activity in the re-finance space with customers seeking the best interest rate with banks offering up to 1 per cent in cashback payments for gaining new customers,” Maisuriya said.

Kaitaia Business Association chairwoman Andrea Panther said an increase in house sales in the Far North was due to a combination of factors such as movement from Auckland and more flexibility for people to work off-site.

“People are definitely wary of an increase in interest rates and so a lot of them are re-valuing their properties,” she said.

Only West Coast, New Zealand’s cheapest housing market, managed to escape the downturn, with its average property value up 2.5 per cent ($10,000) over the quarter to $403,000.