Property owners in some of Whangārei's traditionally cheaper suburbs will find their property values have some of the biggest rises when new valuations are released later this year.
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The revaluation of all Whangārei properties is almost complete and owners can expect to get their new valuation notices in the mail before the end of the year, Whangārei District Council says.
The council is required to value all the properties in its district every three years. The valuations are conducted by an independent valuation company, Opteon, and audited by the Valuer General.
A report by Opteon says the lower end of the residential market has seen the highest movements in capital value (CV).
This has been caused by a high demand for the lower-value properties which are more affordable for first home buyers. Properties at the higher end of the market, such as coastal properties, have also increased in value, although to a lesser extent.
In Whangārei City the average capital value movement has been a 20-45 per cent increase, and the average change in land value has been between 10 and 40 per cent.
In the Bream Bay and coastal areas the average capital value increase since 2015 has been between 25 per cent and 45 per cent, and the average land value change has been between 15 per cent and 40 per cent.
The market for lifestyle properties has moved upwards in line with the general residential trend. This has seen a broad increase in value, generally ranging from 20 per cent to 60 per cent from September 1, 2015 to August 1, 2018.
Key drivers of the lifestyle market include Auckland buyers who are still prominent throughout the district and are targeting beach communities and properties with wide ocean views.
Locals have been capitalising on their residential property by selling and moving into lifestyle areas. There has been stronger demand for properties in the better locations with quality improvements, and bank lending is tougher for buyers entering the lifestyle market as it requires a 20 per cent deposit compared with the residential market which needs as little as 5 per cent.
The rural market in Whangārei has been influenced by the strong lifestyle value increases.
The smaller self-sufficient rural blocks within commuting distance of the city have seen demand from lifestyle buyers pushing out the traditional adjoining farmer. Although the lifestyle component of rural productive farms is increasing, the balance land value per hectare is relatively flat.
Key drivers of the rural market include mycoplasma bovis. Although there is little spread in the North, the negative impacts on the national economy and the risks are becoming high, creating a stigma in the rural market. The dairy payout is up, meaning most farmers' situations are improving against the record lows of the 2015/16 season, although farmers are still recovering and are hesitant to invest in their operations.
Whangārei's commercial market has experienced a positive three years. Broadly, values have moved upwards as a result of increased demand and lower vacancy levels throughout the retail and office sectors.
Opteon noted during the revaluation process that competition between buyers has led to strong sale prices being achieved for quality properties. Demand for coastal areas is coming from out-of-town buyers. Mid to high value properties have sold with relative ease, although require a longer marketing period.
The report also said there is evidence of low-end, poor-condition properties being bought and renovated, then on-sold for a profit with a quick turnover and two-bedroom units are proving very popular with buyers.
The district is revalued every three years. After the 2015 revaluation, the capital value of Whangārei's properties rose by almost 10 per cent in three years. The district's 40,328 properties were worth $19 billion.
The new valuations will be based on the property market conditions as at August 1 and will be used to calculate rates from July 1, 2019.
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