OneRoof Northland Property Report - March 2024

OneRoof Northland Property Report

March 2024

Welcome to the first OneRoof quarterly Property Report this year

We’ve timed this report to coincide with the Easter holiday period and the Brynderwyns being open from March 28 to April 2. Like all long weekends, we’ll have an influx of Aucklanders heading north to visit our fine region, many will pick up OneRoof Northland Property Guide to peruse what’s on the market and get a sense of what’s happening in the north Locals, too, will be inquisitive to see how the real estate market finished up for the first two months of this year and moreover what the real estate market will do over the rest of this year

Northland sales activity in January started slowly, albeit February made up for the sluggish start with sales activity up 57% on January Looking back, we had an amazing summer compared to last year maybe we were all enjoying the fine summer weather too much So, who’s been buying? First home buyers and owner-occupiers have been the most active groups. We’re seeing house prices trend up, you’ll find on page 7 of this report the last three months OneRoof-Valocity House Value Index a positive 0.7% lift Northland property listings have significantly increased this year with now over 2500 Northland properties for sale on OneRoof.co.nz, creating more choice taking away the fear of selling and not finding a suitable house to buy On this page you’ll find the OneRoof House Price

OneRoof House Price Report

March 2024

New Zealand house prices will take less than two years to return to their post-Covid peaks from current levels, new figures suggest.

New Zealand house prices will take less than two years to return to their post-Covid peaks from current levels, new figures suggest

According to market projections by OneRoof and its data partner Valocity, the nationwide average property value will return to its February 2022 high of $1.098 million in the third quarter of 2025

Auckland and Wellington regions will have to wait a little longer, though. Both regions suffered larger declines than the rest of the country and have more to recover The OneRoof-Valocity forecast pins Wellington’s return to peak value in the second quarter of 2026 and Auckland’s return to peak six months later

The average property value in West Coast and Otago has already exceeded previous peaks, and Southland and Canterbury are set to join them later this year Gisborne, Marlborough,Taranaki and Waikato are all forecast to fully recover in the first quarter of 2025

The OneRoof-Valocity projections are based on the average quarterly growth rate for each region in the five years to the end of 2019.

Wayne Shum, senior research analyst for Valocity, said higher for longer interest rates, a cost of living crisis and the impact of the planned debt-to-income ratios would lengthen the housing market’s recovery time

He expected the pace of value growth over the next two years to be much lower than that experienced in 2020 and 2021, when low interest rates and Covid restrictions fuelled a boom in prices.

“We ignored the growth rate between 2020 and 2023 due to extreme volatility in the market during that period – the nationwide average property value jumped 44% then subsequently fell 14%,”he said.

“The growth rate since values hit their trough last year suggests it is returning to pre-Covid patterns. And while past performance may not be a perfect indication of future performance, the Valocity forecast does give homeowners a rough guide for the next two years in the housing market,”he said

The latest house price figures from the OneRoof-Valocity House Value Index show the nationwide average property value was up just 1% ($10,000) in the three months to the end of February, as uncertainty around interest rates curbed buyer appetites.

Auckland property sales in January were the region’s lowest monthly tally since April 2020 when the country was in lockdown in response to the Covid-19 pandemic. February sales have been similarly challenged

Quarterly value growth in the region slowed to 0.2%, down from 2.5% in the three months to the end of November

The best performing region continues to be West Coast; its

average property value was up 4.7% over the last three months to $444,000.

Wellington and Canterbury regions have also picked up pace, with quarterly growth in both regions above January and February levels, while Otago continues to benefit from strong interest in Queenstown-Lakes

However, the market was sluggish for much of the rest of the country, with the average property value in Marlborough and Nelson dropping in the last three months

The figures show Queenstown-Lakes is still the most popular location for buyers in the upper price bracket, with the local authority recording property value growth of 4% quarter-on-quarter

Momentum also appears to be slowly building in Wellington City and Tauranga The rate of value growth in Christchurch, on the other hand, has slowed from 3% in the three months to the end of September to 1.7% in the three months to the end of February

In Auckland, property value growth has stalled or dipped in the region’s former local authority districts

The housing market’s bumpy road to recovery can also be seen in the suburb value figures In January 90% of all suburbs with 20-plus settled sales in the previous 12 months recorded quarterly value growth In February, that dropped to 70%, with some suburbs recording quarterly drops of more than 4%.

In contrast, stock levels have rebounded, with new residential listings up nearly 30% year-on-year nationwide and nearly 47% in Auckland.Total residential listings on OneRoof for February were up 9.8% year-on-year, reflecting increased optimism among sellers.The flood of new homes on the market after a relatively long drought could put power back into the hands of buyers

When will NZ's average property value return to peak?

The graph shows the monthly change in New Zealand's average property value since 2010 Also shown, in red, is the projected return to peak based on the average quarterly growth rate of 1 9% for the five years leading up to 2020

Property value data derived from the OneRoof-Valocity House Value Index, taken on February 20, 2024

Chart: OneRoofco nzSource: OneRoof/Valocity

Elevating Elegance with Innovation

As the sun sets on another successful year, Vetro Raccordi Frameless Glass stands tall, a beacon of innovation and quality in the glass industry.

Since its rebranding from Northland Specialty Glass in August 2022, the company has not only retained its local charm but has also soared to new heights of success, blending Italian sophistication with New Zealand precision engineering

Under the stewardship of Alan Ea t affectionately known as ‘Springy Vetro Raccordi has flourished, thanks in no small part to the unwavering support of its loyal customers Alan extends his heartfelt gratitude to each patron who has walked alongside the company throughout its journey

Located at 150 Lower Dent St, the green shop front symbolises not just a change in appearance, but a testament to the company’s commitment to growth and evolution While the name may have evolved, the essence remains the same – a dedicated team of professionals striving for excellence in every aspect of their craft

Vetro Raccordi Frameless Glass has transcended its local roots to become a nationwide recognised brand, yet its core values of quality and customer satisfaction remain steadfast As the local supplier and installer, the company ensures a seamless experience, offering a diverse range of products including glass balustrades, pool fences, showers, splashbacks, hardware, and mirrors

What sets Vetro Raccordi apart is its fusion of exquisite Italian design with the precision of New Zealand engineering Each product exudes timeless elegance, meticulously crafted to elevate any space Whether it’s a bespoke glass shower surround or innovative balustrades, the options are endless, tailored to meet the unique needs of every customer

Attention to detail is paramount at Vetro Raccordi, with a wide range of customisation options available, from colour choices for fixtures and hardware to the selection of specialty glass, paints, and finishes The result? A masterpiece that seamlessly integrates into any environment, enhancing its aesthetic appeal

The journey from concept to completion is meticulously managed by Alan and his experienced team With years of industry expertise, they offer invaluable advice and solutions, ensuring the end product surpasses expectations

As Vetro Raccordi Frameless Glass continues to flourish, Alan remains steadfast in his commitment to delivering top-quality products to Northlanders and beyond The company will continue to expand its reach while maintaining its local roots

In essence, the spirit of excellence will always stay at Vetro Raccordi Frameless Glass As they forge ahead into the future, they invite you to experience the epitome of elegance and innovation in glass craftsmanship

Frameless glass embodies sleek, invisible beauty for timeless elegance

Paired with quality hardware from the Vetro Raccordi collection, it seamlessly combines clarity and style for effortlessly chic surroundings.

House Value Index, taken on February 20, 2024 Only suburbs with 20 or more settled sales in the last 12 months shown

OneRoof News / Northland

Far North property has two residences and was last on the market 40 years ago

One of Paihia’s landmark waterfront

estates is on the market after 40 years and is a much-loved local icon Chester and Louise Rendell bought the 1467sqm property in 1983, when it was a seven-unit motel and Devonshire teahouse

“It was the worst house on the best street,”says Chester, co-owner and also the sales agent from New Zealand Sotheby’s International Realty

“We had a few prerequisites when we were looking to buy the property We thought,‘if we ’ re going to do motels, we do it in Northland, if we go to Northland, we have to go to the Bay of Islands, if we go to the Bay of Islands, we have to go to Paihia, and if we go to Paihia, we have to be on the waterfront’

“Six weeks after purchasing we realised there’s no money in scones, jam and cream ”

Over the decades the property has morphed significantly in terms of its usage but has always proudly retained its grand and gracious heritage features and is firmly entrenched in New Zealand’s North Island history

“Downstairs at the back was an original cottage that was built in 1884 and then the front part and the upstairs was built in the early 1920s,” shares Chester

40 Marsden Road in Paihia, Far North, is

being marketed for sale by price on application

The two-residence 1467sqm property with a combined seven bedrooms, five bathrooms and lots of off-street parking has a 2022 RV of $2.35 million

Today, it comprises the much-admired, two-storey colonial building in the front, which incorporates an open-plan, three-bedroom apartment on the first floor showcasing sea views over to Russell and beyond On the ground floor is JFC restaurant, a popular spot for a drink and bite to eat overlooking the beach

“Over the past 40 years in the downstairs part of the main house, we ’ ve set up four restaurants JFC is the latest one, ” says Louise

The good news here is that if somebody wants to buy and run the business they can, but it’s certainly not compulsory

“The restaurant business can be a scary option these days,”says Chester “Because we own it there’s no lease in place, no nothing You can just shut it down if you wish.”

Louise adds: “Or, if they didn’t want to do that, they could live in our current upstairs apartment and transform downstairs into another apartment. People could use it for accommodation or they may simply want another residence so that when family and friends visit,

is a standalone, two level, four bedroom family home, which the couple run as a short-term holiday rental called Bayswater While it’s a nice earner currently, Chester says that they have approval to subdivide it

“If somebody says,‘I love the front house but not the back house,’then they can just complete the subdivision and sell it off ”

This picturesque location is world-class and coveted by locals and visitors from far and wide

“You can walk into town or hop on the ferry go across to Russell It’s so central and surprisingly enough, it’s quiet You might be right on the waterfront but it’s a peaceful environment,”says

Louise

Chester adds: “We’re not in the town, we ’ re a couple of hundred metres from the village so you don’t get that intensity all the time ”

time is right to move onto their next chapter

“When you say to people that you ’ ve been here for 40 years it falls glibly off the tongue, but it’s quite a long time No one else has lived here as long and we ’ ve invested a lot of time, effort and energy into the property, so now it’s time to say sayonara, ” says Louise

What the couple envisage, is a buyer with passion and vision transforming the entire main house back into a spectacular private residence

“We’d love to see the house returned to its former glory, upstairs and down as a homestead,” says Chester

“In the 1920s there used to be houses like this all along the waterfront for the rich and famous to holiday at – this is the only one left It’s got a very special meaning to Louise and I, the fact that the original bones are still here ”

Abandoned school bought on a whim for $125,000 going to auction with low reserve

OneRoof News / Northland

HOW MUCH WOULD YOU SPEND ON A DESERTED COUNTRY PROPERTY?

An abandoned school in rural Northland that was bought on a whim for $125,000 and now only fit for camping is now being auctioned off with a low reserve

The former Towai School on Ford Road, in Hikurangi, closed its doors for the last time in 2004 and while the students are long gone signs of its former life are evident from the dilapidated school building, drained swimming pool and deserted toilet block

Housing NZ bought the 2.02-hectare property for $250,000 two years after the school’s closure with the plans to build four low-cost homes on the site Opposition from residents and restrictions preventing multiple dwellings to be built on the rural land saw it put on the market nine years later

Ray White salesperson Alex Smits said the current owner was driving home from visiting family in Northland when he spotted a For Sale sign outside the school.

The owner had no real plan for it other than falling in love with the nearly 130-year-old timber building and thinking it was a good opportunity, he said

“I think it was bought on a whim, had some cash in his back pocket and thought at that price it’s a good buy ”

A coffin maker had been living in the property rent-free in return for keeping an eye on the property until about 10 months ago

However, it was now empty, and the owner had

decided it was time to sell

“The vendors want rid of it; they don’t have the capacity to deal with it and they want to make sure it’s passed on to someone else that does have that capacity ”

towai school inside

The Ford Road building was last used as a school in 2004. Photo / Supplied

towai pool

The old swimming pool also remains on the site Photo / Supplied

Smits said it offered plenty of possibilities being just a 30-minute drive from Whangarei.

“It’s a large imposing structure comprising two buildings, and it wouldn’t take much imagination to transform it into a beautiful house, backpackers’accommodation, or schoolhouse It may also suit communal living arrangements with lots of space to bring cabins and caravans

He wouldn’t live in the property in its current ‘ as is, where is’state, but said it was perfect for camping

“You could have cabins or caravans with communal living facilities It’s got the old toilet block and whatnot, which would suit that down to a T

“It’s just over 2ha of easy land so you could run a few livestock and put in gardens and orchards for self-sustainable living ”

The next owners could also be grabbing themselves a bargain as the property is to be auctioned with a low reserve, he said

The 2.02ha site would lend itself to communal

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“It will be a low reserve comparative to what else is on the market, it’s probably going to sell for maybe less than what a bare block would sell for, but we don’t know

“That’s the beauty of auctions, it will find the market value for it.”The old school building at 9

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29 Lower Tarewa Road, Morningside 0110

Homeowners are on edge, waiting for signs of a cut to the OCR.

ANALYSIS: Last week, the Reserve Bank of New Zealand decided to hold the Official Cash Rate at 5.5%.

In its accompanying statement, the RBNZ said that while “risks to the inflation outlook have become more balanced”, the cash rate would need to “remain at a restrictive level for a sustained period of time”to ensure headline inflation return to the 1-3% target

So what does “sustained period of time”mean?

The RBNZ’s latest outlook for the OCR is “slightly lower”than what it had outlined in its November 2023 statement, but it looks as if it doesn’t plan to drop the OCR until the end of this year or early 2025.

Two of the country’s major banks, ASB and ANZ, have reacted to the latest decision by cutting some of their home lending rates.That’s significant in the case of ANZ, which had predicted further cash rate hikes this year

The RBNZ’s latest cash rate forecast can be seen in the graph below These forecasts are important as they can influence current housing market sentiment, but how dependable are they as a marker of future activity and decisions? Let’s find out

While the RBNZ’s language around inflation in its statement last week was less harsh than many had expected, it doesn’t plan to drop the OCR any time soon

Inflation is still too high at 4.7%, with the RBNZ acknowledging that high interest rates are doing their job (that’s why there is a lower chance that the OCR will increase again).

Back in November, the RBNZ’s forecasts implied there was a 75% chance of the OCR being raised one more time The latest forecast lowers that risk to 40%. So there is a betterthan-even chance that the OCR’s next move is downward

The forecasts also point to a quicker return to lower rates when the RBNZ finally starts cutting the OCR

So will the RBNZ stick to its guns and hold the OCR until the end of the year?

Going on past performance, RBNZ tends to stick closely to its own OCR forecasts for the first six or seven months of the year Markets are currently pricing in an OCR cut, perhaps as early as September Don’t dismiss that straight away

It is possible and would be consistent with the RBNZ’s own track record

Prediction 2: House prices will rise 3.4% in 2024

The RBNZ’s forecast of 3.4% house price growth in the year to the end of December is lower than its previous forecast for 2024, but it’s probably better to ignore the RBNZ’s house price forecasts altogether They are just guesstimates

Since Covid hit, the RBNZ’s house price forecasts have been, like everyone else’s, totally off On average, the RBNZ tends to be 4.6% off, so when it says house prices could climb 3.4%, the actual figure could easily range between -1.2% and 8%.

Prediction 3: “We should be seeing the banks working hard to win against one another”

While not a formal forecast, the RBNZ’s February statement did contain some welcome news for borrowers

There had been speculation in the lead up to the February statement that the RBNZ had had a private word with the major banks, urging them to keep their rates high.

This is worth paying attention to If the banks lower their interest rates, that won’t necessarily lead to fresh worries about inflation and as a result a fresh round of OCR hikes

That will bring some comfort to anyone with a mortgage Most of the major banks have lowered their rates over the last three months, albeit by small amounts.

These are small changes, but they show the direction of travel over the next year

The RBNZ has quashed such thoughts

Answering a question last week from New Zealand Herald reporter Jenée Tibshraeny, RBNZ Governor Adrian Orr said he was comfortable with mortgage rates decreasing “Yes, it’s a competitive environment banks will compete with each other on their pricing,” he said.

“I really do hope it’s competitive out there because I imagine it’s in a low-volume market as well. We should be seeing pricing pressures

We should be seeing margins tightening up We should be seeing the banks working hard to win against one another ”