OneRoof Property report: Northland's average house price rise higher than NZ and Auckland

Matt and Terai Ella have found properties in Whangārei are more expensive than in bigger cities like Christchurch. Photo / Michael Cunningham

Northland's average property value rose a staggering 29 per cent in just one year— that's more than in Auckland and New Zealand as a whole — and Matt and Terai Elia aren't the least bit surprised.

The Whangārei couple paid nearly $900,000 for a four-bedroom house in Totara Parklands and think house prices in the district are a lot more expensive than in Christchurch, where they paid $415,000 for a property with a big section.

According to the OneRoof-Valocity Property Report, out today , Northland's average property value rose by $190,000 in the one year to November 15 and 28 suburbs in the region have houses worth $1 million or more.

That's five more than in September 15, when the last Property Report numbers were run.
Sixteen of those are in Whangārei and they are Tamaterau, Maunu, Kauri, Whangārei Heads, Maungatapere, Ruatangata West, Parua Bay, Poroti, Whareora, Langs Beach, Whananaki, Waipu, Glenbervie, One Tree Point, Ngunguru, and Tutukaka.

At 55 per cent, Tamaterau has had the biggest jump in values throughout Whangārei and the current average value currently sit at $1.2m.

The lowest 12-month growth (23.2 per cent) was in Ngunguru, where the average value of a house is just over $1m.

The Elias moved from Christchurch about three years ago to start a business in Whangārei and had initially planned to buy land and build on it.

"We then decided against the idea given the ever-rising price of land and delays in getting building materials. Whangarei is a great city, with a laid-back lifestyle, weather is good but we thought house prices were more expensive than in Christchurch."

They moved into their new home on November 1.

Terai Elia, a mother of three, is studying to become a nurse and said her family was likely to settle in Whangārei once she graduated.

OneRoof editor Owen Vaughan said the rush to buy until about three months ago, due to a signal that interest rates would go back up and changes to the Loan-To-Value-Ratio (LVR), pushed house prices up.

"What we've been seeing in the last few weeks is the market has shifted and buyers are becoming more cautious. The expectation and economic prediction over the next three months is that the market will start to cool down.

"However, even with modest growth predicted in 2022, Whangārei's average property prices will hit the $1 million mark," Vaughan said.

He said the 12-month surge in the Northland housing market came at a cost.

The 20 per cent deposit required on a typical Northland home is now $167,000, which is $38,000 more than in November this year, he said.

However, Vaughan said rising prices have not deterred first-home buyers, who steadily increased their share of the market since the start of the year— from 29.2 per cent in the first quarter to 36.3 per cent in the third, rising to 38.7 per cent in the last quarter.

Vaughan said investors' share of new purchases has been between 21 per cent and 24 per cent over the course of the year.

Sandeep Maisuriya, a financial advisor at Zest Brokers in Whangārei, said buying a house or building new was easier until about four months ago before interest rates crept back up.

"First home buyers are out of the market now because as of about a week ago no bank was lending at 10 per cent deposit. I've got several clients that have got approval from the banks but they are still looking for a house.

"As soon as interest rates went back up and investor rules came into force, investors were culled and people started looking at building houses because it gave them better value for money," Maisuriya said.

Sandeep Maisuriya of Zest Brokers says mortgage rates going back up has pushed first home buyers out of the market. Photo / Michael Cunningham

He said a house in Totara Grove, Tikipunga, which used to cost $750,000, was now fetching close to $900,000 due to a mixture of high interest rates, increased construction costs and issues with building supplies.

Mortgage rates have risen sharply over the last six months but term deposit rates have not gone up anywhere near as much.

In June, the two-year fixed-term mortgage rates were around 2.49 per cent. Now they have risen to around 4.35 per cent at the main trading banks— an increase of 186 basis points.

But a six-month term deposit rate is now earning 1.4 per cent compared to 0.82 per cent— an increase of just 58 basis points.

The average house price in Whangārei is slowly but surely creeping closer to $1 million. Photo / Michael Cunningham

Of the 33 suburbs that recorded 20 or more settled sales in 2021, Kensington enjoyed the strongest quarterly growth.

The average property value in the suburb, which is earmarked for future development and intensification, grew by $77,000 to $686,000.

Tamaterau, Maunu, Kauri and Parahaki were not far behind, recording three-month growth of 9.5 per cent, 8.8 per cent, 8.2 per cent and 8.2 per cent respectively.

At $2.1m, Langs Beach is still Whangārei's most expensive suburb and Otangarei the cheapest at $386,000.

Kamo saw the highest turnover of settled sales at 388 in the last year.