Known as “the winterless north” for its subtropical climate, Northland’s expanses of green and productive farmland, white sandy beaches and scenic locations like the Bay of Islands all combine to make it a popular place to live.

The region is home to about 204,000 people, with roughly half living in the largest city, Whangarei, sometimes described as the city with 100 beaches.

Northland’s economy is built on tourism, farming, timber and marine engineering. Some of the world’s most exclusive super yachts have been built in Whangarei.

Other industries around the region include cement manufacture, wood products and dairy processing. About two thirds of the region’s land area is used for pastoral farming, while tourism activity in Northland is higher than the national average.

Whangārei itself is a bustling town. Whangarei Falls tumble over cliffs into a natural pool, while overlooking the city volcanic Mount Parihaka features a war memorial and the remains of Maori villages. The city is particularly rich in Māori tradition, having welcomed the canoes of the first explorer, Kupe, about 800 years ago. Today, about a quarter of Whangarei’s population identify themselves as Māori.

In the middle of the city, by the Hatea River, the Town Basin is a boat-dotted marina with restaurants, shops and galleries. Nearby, Claphams National Clock Museum displays an eclectic mix of vintage clocks.

About two hours north of Auckland and about 90 minutes south of the Bay of Islands, the area has 100 walks, many within 30 minutes of Whangarei city centre, bringing spectacular views and plenty of wildlife.

‘Rat Race’ Escape

The average commuting time in Whangārei is 20 minutes, making it attractive for families and Aucklanders wanting to get away from the “rat race”.

Whangarei offers a choice of family homes, townhouses and apartments across 25 suburbs. The most expensive suburb is Matapouri, which had an average house value of $1,322,100 in July, while the most affordable suburb is Raumanga, which had an average house value of $480,550, REINZ data shows.

In data collected by CoreLogic house prices have risen between 0.3 per cent and 3.2 per cent in five suburbs, while they have also dropped between 0.1 per cent and 0.9 per cent in five suburbs in the year to August 1.

At the top of the scale, prices increased 3.2 per cent in One Tree Point from $1,045,100 to $1,078,450, followed by Manu where house values rose 1.5 per cent from $834,000 to $846,650 and Onerahi, where prices lifted 1.1 per cent from $618,400 to $625,350.

Further down the ladder, house prices had the biggest fall of 0.9 per cent in Kamo, drifting from $705,450 to $699,250. In Whau Valley they fell 0.8 per cent from $643,550 to $638,300 and Avenues house values declined 0.7 per cent from $552,450 to $692,250.

Cheap Property

After sitting on the sidelines for the past three years, investors are coming back into the market, says Bayleys branch manager Steve Sharp.

“In the past six weeks to a month, after the SH1 Brynderwyn Hills reopened, the OCR was cut and banks eased up slightly on lending, sales have taken off. People are starting to feel property prices have bottomed out and at the same time interest rates are dropping.

“Investors with cash or equity in existing property are out there buying because over the next year prices will certainly start to rise, particularly if the Reserve Bank makes further cuts to the OCR this year.”

Sharp says there is a definite mood that the market is shifting. Investors and first-home buyers are competing in the under $600,000 segment.

Investors are jumping on cheap stock in the $300,000 range, investing $50,000-$100,000 in a rundown three-bedroom, one-bathroom home to get it into a rentable state.

The return of ultra-cheap properties has been recent. “There was a time when the property market was at its peak, there was nothing for sale under $500,000. In a reversal of fortune, we are now seeing property listed in the $300,000 range every now and then.”

Above the average range of $600,000 buyers are thin on the ground, although there have been some sales in the $1.2-$1.5 million bracket.

There was one exception. In an unexpected blip during May when 120 sales were made, 20-25 of those were for properties listed at more than $1 million – the most Sharp has seen sell at those prices within a month.

Fluctuations

It comes down to market fluctuations and the sort of buyers that are around, he says. “It was just prior to the Brynderwyns shutting down. That closure killed a lot of sales in the Bream Bay area, where many of the high-priced houses are located, but the Whangarei market wasn’t affected greatly and just carried on.”

That has meant sales in Whangarei of about 120 a month have been fairly static over the past six months. Sharp says what has been evident is the number of listings dropping in comparison with other areas of the country, where they have surged.

Four to five months ago listings for Whangarei were topping 1,100 on Trade Me. In August they had dropped back to 1,000. “Whether that is people unable to sell and pulling their property off the market or sales being made and the stock not being replenished is hard to know,” Sharp says. “It has, however, helped stabilise prices, which is pulling in first-home buyers and investors.”

There was no slow-down in average priced property sales during the winter this year, when typically there would be a slump until spring. Of the 303 houses listed recently about 100 were in the range of up to $600,000, but many were priced by negotiation. Sections are also included in the listings as subdivisions have been widespread in the city over the past couple of years. Sharp says there is no shortage of sections for sale.

More than 60 per cent of buyers in the city are Whangarei residents, 25 per cent from Auckland, and the rest either expats or from further south. Flipping those numbers on their head, 65 per cent of buyers at Bream Bay have been from Auckland, as lower priced properties start at $700,000.

“It is quite a different market in the One Tree Point, Bream Bay area,” Sharp says. “A lot of Whangarei’s newer housing is in Bream Bay and investors struggle with it as they could be paying $800,000-$900,000 for a property that will return only $680 a week in rent. It doesn’t stack up.”

Whangarei District Council has been progressive and earmarked land for housing subdivision over the next 10 years, Sharp says. “Growth is definitely on the council’s agenda but much of it comes down to what will happen with the port and Marsden Point, where the oil refinery was decommissioned two years ago and converted into an import-only fuel terminal.”

Apartments Call

Whangarei’s rental market has turned a corner with not as big a shortage of houses as there was last year.

But it comes with a kicker. Propertyscouts business owner Didi Skinner says while there are more houses available, there are still not enough to cover different needs. For example, there is a big need for small two-bedroom apartments and there are not enough available, and rents are quite high.

“So, somebody who wants a specific property will sometimes struggle to find it. I’ve got a single mum with one child and housing them is quite hard. Although there are plenty of three-bedroom houses available, she can’t afford them.”

The difference between a two-bedroom and three-bedroom property is about $50 a week, down from $100 a week, but $50 a week is a lot to find for some tenants, she says.

Also complicating rental issues for many tenants is that until landlords can use the 90-day “no cause” termination clause for periodic tenancies they are unwilling to give tenants a chance, Skinner says.

“Many Northland renters, compared to national benchmarks, don’t have good rent records or a good credit history and there are not many properties available to them. Private landlords are nervous about giving them a chance when the existing legislation, which is due to be changed next year, doesn’t allow them to.”

Whangarei landlords are in the same boat as others around the country: it’s taking longer to rent their properties. Skinner says until the cost-of-living crisis became a head-on battle for most people and businesses, Propertyscouts would be housing at least one tenant a month for the hospital, Fonterra, developers and other big employers, but none of them are now hiring. “All the places we normally source tenants from are on hold.”

Green Shoots

She says it’s not easy to find a job for people who want to move to the country’s most northern city. “Fewer people are coming into town and immigration is down, way down. We would normally house at least three immigrating families a month minimum. That’s gone down to almost zero or one a month now.”

The agency, however, does have an advantage over others with its community links to charities and social agencies and is helping to fill tenancies that would have normally stood open. “That gives us an option of being able to provide owners with a little bit more security.”

Some promising green shoots are also coming up, she says. The hospital will be hiring soon, and projects are on the board at Channel Infrastructure, (previously Refining NZ), Chamber of Commerce, Fonterra and engineering companies. “We are hopeful we will start hearing from tenants applying for positions with those organisations.”

Landlords are taking it in their stride. Skinner says it’s not totally uncharacteristic for rents to slow down a bit in the winter, but there won’t be a problem in spring as the market is heating up. “In August five new rentals were put on my books, all bought by Auckland and Wellington investors. Four of them rented before the sales had been settled.”

She says the market has definitely turned in Whangarei. While price rises for houses haven’t been noticeable yet, people are quickly buying because they’re worried that once sales start going up, prices will too.