The fortunes of Whangarei’s residential market have bounced back strongly over the past 12 months.
Enquiry levels, prices and activity have all recorded strong increases driven in large part by a growing number of Auckland based investors and Auckland ex pats moving north. This is a dramatic turnaround following an extended period of lacklustre performance post the GFC.
What is also interesting this time around is that rising buyer demand is not being matched by a flurry of new supply. Developers appear to be taking a much more cautious approach which should help underpin recent price gains. Going forward, the following economic catalysts also have the potential to support population growth and housing demand in the region:
Tai Tokera Northland Economic Action Plan – If successfully implemented, the recently released Action Plan (which feeds on from the opportunities highlighted in the Feb 2015 Northland Growth Study) has the potential to significantly boost Northlands economic prospects over the next 10 years through the select targeting of a number of growth projects in areas such as transport and IT infrastructure, tourism, aquaculture, horticulture and education. Read more...
Residential Conditions Tightening
The latest Northland data from realestate.co.nz shows just how rapidly residential market conditions have tightened. Using the numbers as a proxy for Whangarei it shows both sales volumes and new listings for the month of February 2016 were up compared to the same month last year as buyer activity increased. However the total number of residential properties for sale at 2,201 is well down from 3,350 last year and the historic annual average of 3,582. This has left the number of weeks to sell the total inventory (based on current sales volumes) at the lowest levels in 8 years at approximately 10 months compared to up to 2 years as recently as mid 2014. Agency feedback suggests conditions have improved even more rapidly in Whangarei with ‘weeks to sell’ at the tightest levels seen for many years.
Prices Up, Activity Up
Whangarei’s residential market experienced a complete turnaround in 2015. Buyer demand in both Whangarei City and County has surged over the past 12 months with the number of sales up 45%. This is now feeding into price rises with Whangarei City’s median sell price up 7.3% to $300,000 and an even stronger 12.3% to $455,000 for Whangarei County. This compares to annual growth rates of just 1% and 3.6% respectively over the past 5 years. Based on historic trends median residential prices in Whangerei City are now at the same highs achieved in the previous up cycle in 2007/2008. Whangarei County prices have, in fact, already exceeded those previous highs. Areas such as Whangarei Heads have seen their median price rise to $600,000, up a significant 52% over the past year. Tutukaka prices are up 11.5% to $551,500 over the same timeframe. By comparison the number of sales in both Whangarei City and County, although rising sharply, are still well below the levels achieved over 2007/2008. Read more...
An analysis of recent “Bayleys only” residential sales in the Whangarei area highlight the growing foot-print Auckland buyers are making. Over the last quarter of 2015 they represented 42% of total Bayleys residential sales, however in certain locations such as Whangarei Heads and Bream Bay the percentage is even higher at around 67%. Agency feedback suggests this Auckland momentum is expected to continue over 2016 with two key buyer groups driving demand - (1) high equity Auckland home owners looking to free up cash and change lifestyle by moving north and (2) investors chasing higher yields than those on offer in Auckland.
Spotlight – Bream Bay
Bream Bay physically spreads from the mouth of Whangarei harbour some 25 kilometres south to the southern point of Waipu Cove/Langs Beach. The four major residential locations within Bream Bay are One Tree Point, Ruakaka, Waipu and Mangawhai (just around the southern head of the Bay).
The past year has seen a sharp increase in activity in the area with overall residential sales volumes are up 35%. Price growth has also been robust especially at the upper end where it has averaged between 9% to 29% depending on the sub-market. Read more...
Northland Coastal Residential Market
Conditions in the broader Northland coastal and waterfront market are also improving. The Auckland ripple is fi nally reaching markets further north as buyers discover just how far their dollars go if they are prepared to travel further.
In some areas such as Paihia this has yet to translate into in price growth however the number of sales in the area are surging, up 60% over the last 12 months, signalling buyers are taking full advantage of what they perceive are current price anomalies.
Other areas such as Kerikeri have recorded both solid price and volume growth over the past 12 months, up 13.5% and 35% respectively. Russell has also recorded very strong median price growth over the past 12 months, up 17.2%, off the back of reasonable volume growth. However the upper end of the Russell market still remains subdued.
Closer to Auckland areas such as Omaha continue to record strong price growth, up 16.5% over the last year, and an average 10.8% per annum over the past 5 years. Transaction volumes however have eased by 28% over the past 12 months due to a lack of stock.
Read the full Marketbeat report online here.