Following a period of rapid price growth, Whangarei residential market has entered a period of consolidation. Over the March 2018 quarter a median sales value of $439,500 was recorded, up 2.6% from the same period a year earlier. Sales activity has also held up over the first quarter of 2018, increasing by 2.2% since the prior quarter. This is in contrast to most other regional markets where activity levels have eased. Whangarei’s entry point continues to remain attractive to buyers, although we would expect the market to follow Auckland’s lead of easing activity later in the year.
Whangarei is a growing regional centre providing a wide range of amenities and lifestyle advantages. The region has a warm climate and a friendly, laidback environment with popular surf beaches. Acting as a more affordable entry point for buyers into the market or as a destination for Auckland escapees, downsizers and retirees, the Whangarei population continues to grow. Over the first five months of 2018, 30% of all transactions conducted by Bayleys were to Auckland purchasers emphasizing the appeal of this market.
Tight market conditions are triggering an increased supply response from the development sector. The number of building consents issued over the year to March 2018 was up by 31% compared with two years prior, with detached dwellings continuing to dominate new supply.
The rise in residential property values is well illustrated in the chart above which shows the change in the proportion of sales within various value bands over the last three years. The number of sales greater than $400K now represent 60% of total market sales, compared with 36% two years ago. The number of sales under $400K, on the other hand, continues to decrease and now represents just 40% of the market.
Spotlight: Whangarei County
Values in Whangarei have surged since the beginning of 2015 with Whangarei County property in particular showing unprecedented growth. Whangarei County’s median value over the March 2018 quarter reached $655,000, the highest level on record and up 36% when compared to the March quarter two years earlier. While the number of transactions for Whangarei City are holding up, transactions for County property have eased off over the year to March 2018 from their more active levels over 2016 & 2017, agency feedback however suggests that interest and enquiry levels remain high.
Spotlight: Bream Bay
Towns in Bream Bay have experienced robust growth over the year to March 2018 with the most significant increase in value witnessed in Mangawhai, up 22% on the prior year. Although values have held firm, all towns have seen a decrease in the number of transactions over the year to March 2018 when compared with the year prior. One Tree Point witnessed a 45% decrease in sales activity over the last year, it is, however, important to note the comparatively small market size.
The possibilities of the shift of Auckland’s port to Marsden Point, Whangarei and the North of Auckland rail line upgrade would be a game changer for the region, although this remains more of a median to long term prospect.
More immediate is confirmation that the government will contribute $9.94 million from the Provincial Growth Fund towards the $26.5 million two year construction of the Hunderwasser Arts Centre (including the Wairau Maori Art Gallery). More than half of the cost of the project has been raised by the community. The new Centre is expected to attract as many as 202,000 visitors per year and could also lead to further hotel accommodation being built to cater for increased tourist traffic. The “YesWhangarei” website (run by the Whangarei Art Museum Trust) notes that a further 130 hotel rooms maybe viable as a result, which combined with staffing at the Hunderwasser project could provide around 100 jobs.
Whangarei Hot Spot Map (6 Months to March 2018)
Over the 6 months to March 2018, the Whangarei District has seen close to 1,300 residential properties transacted. The map below shows the dispersion and value of these sales across the district. Drilling into Whangarei City in more detail shows key hotspots include Woodhill, Kensington, Kamo & Onerahi.