The town that has seen the strongest value growth since the pandemic struck is Rawene, which went up 42 per cent to $527,000. Photo / Peter de Graaf
The town that has seen the strongest value growth since the pandemic struck is Rawene, which went up 42 per cent to $527,000. Photo / Peter de Graaf
Northland house prices may have plummeted more than the average resident’s income in the last year, but homeowners are still ahead as values are “significantly up” from where they were pre-Covid.
The latest OneRoof data shows Northland average property values dropped 9.3 per cent, or $86,000, in the last yearto $839,000.
That’s compared to the national average of $958,000, a drop of 12.3 per cent, or $134,000.
That’s a big drop for Northland homeowners when the average annual income sits at $44,700 from all sources, and just under $60,000 from people in paid employment.
But homeowners can rest easy in the knowledge that New Zealand, and Northland, property values are still well above levels recorded in March 2020, just before the Covid-19 pandemic hit.
“The decline in property values we saw last year is starting to slow.”
Whangārei is up 31.9 per cent ($208,000) on pre-Covid levels, Kaipara is up 42.2 per cent ($271,000) and the Far North is up 38.1 per cent ($216,000).
OneRoof editor Owen Vaughan said though property values have decreased, they are still significantly up from where they were pre-Covid.
The town that has seen the strongest value growth since the pandemic struck is Rawene, which went up 42 per cent to $527,000.
Horahora had the least growth, with an average property value of 23 per cent.
Vaughan said it was currently a buyers’ market, “but there’s a little bit more competition in the market, so the signs are it won’t last for long”.
“The slowdown in the price decline means house-price falls are no longer happening; the slump appears to be over in Northland.
“For buyers out there, this is as good as it’s going to get.
“In the months coming, you might see small increases in property prices. If you’re looking right now, don’t hang around, because you might see property prices increase.”
Vaughan said this was a good time for sellers as well.
“Most sellers will be significantly up on where they were pre-pandemic.
“For the vast majority of Northland homeowners who bought before Covid, their home is still a huge amount more than when they bought it.
“For buyers, the fact those price declines seem to be coming to an end - that should focus their mind on buying now, before prices start to climb again.”
Bayleys Whangārei residential sales leader Rachael Dennis said buying a home wasn’t just about the price.
The condition of the home, along with consents and compliance, all mattered when it comes to securing finance, she said.
Bayleys Whangarei residential sales leader Rachael Dennis said buying a home isn't just about the price.
Home buyers should also consider the impact of inflation and rising interest rates, especially after the Reserve Bank (RBNZ) recently hiked the Official Cash Rate by 50 basis points to 5.25 per cent.
The 11th successive hike takes the rate to its highest level since December 2008, which was mid-Global Financial Crisis.
This, combined with the prolonged cost of living crisis, may have first-home buyers thinking twice.
“The price may seem affordable for some in numbers, but if the property is missing some things the banks need, it might not make any difference,” Dennis said.
“Also, the banks might be assessing you on a higher level than the interest rates.”
Dennis said the proposed easing of the loan-to-value rules (LVR) from the Reserve Bank could make a difference.
The RBNZ wants to loosen loan-to-value ratio restrictions to enable more owner-occupiers to get mortgages with deposits of less than 20 per cent.
It also wants to lower the minimum deposit the bulk of investors need to have from 40 per cent to 35 per cent.
The RBNZ is currently consulting with banks on the proposed change with the aim of implementing it by June 1.
Dennis said there were still “good numbers” turning up to open homes.
“If they want to sell, the market is still buoyant enough, and there’s enough activity to allow lenders to get a good price.”
