This page contains information about the results of a report by Opteon, our valuation provider.
20/11/2018 3:34 p.m.
A report by Whangarei District Council’s new valuation provider Opteon, says the lower end of the residential market has seen the highest movements in capital value (CV).
This has been caused by a high demand for the lower value properties which are more affordable for first home buyers. Properties at the higher end of the market, such as coastal properties, have also increased in value, although to a lesser extent.
In Whangārei City the average capital value movement has been a 20-45% increase, and the average change in land value has been between 10 and 40%.
In the Bream Bay and coastal areas the average capital value increase since 2015 has been between 25% and 45%, and the average land value change has been between 15% and 40%.
The market for lifestyle properties has moved upwards in line with the general residential trend. This has seen a broad increase in value, generally ranging from 20% to 60% from 1 September 2015 to 1 August 2018.
Key drivers of the lifestyle market include Auckland buyers who are still prominent throughout the District and are targeting beach communities and properties with wide ocean views. Locals have been capitalising on their residential property by selling and moving into lifestyle areas. There has been stronger demand for properties in the better locations with quality improvements, and bank lending is tougher for buyers entering the lifestyle market requiring a 20% deposit compared to the residential market needing as little as 5%.
The rural market in Whangārei has been influenced by the strong lifestyle value increases. The smaller self-sufficient rural blocks within commuting distance to the city have seen demand from lifestyle buyers pushing out the traditional adjoining farmer. Although the lifestyle component of rural productive farms is increasing, the balance land value per hectare is relatively flat.
Key drivers of the rural market include mycoplasma bovis. Although there is little spread in the North, the negative impacts on the national economy and the risks are becoming high, creating a stigma in the rural market. The dairy payout is up, meaning most farmers’ situations are improving against the record lows of the 2015/16 season, although farmers are still recovering and are hesitant to invest into their operations.
Most banks require a 40% deposit which limits some buyers and therefore demand, and Whangārei’s location and range of soils makes it difficult to buy a farm with the best of everything needed.
At the same time, productive farms in the north are generally "affordable" compared to other areas, and this makes them appealing for first farm buyers, who are happy to take over a farm that requires improving. Well-established farmers prefer to purchase a property with quality dwellings and infrastructure.
Whangārei’s commercial market has experienced a positive three years. Broadly, values have moved in an upwards direction as a result of increased demand and lower vacancy levels throughout the retail and office sectors.
Similarly, the industrial sector has also experienced a positive three years. Modern and well-presented properties are performing well. There has been some decrease in demand for older dated premises.
Other trends Opteon noted during the revaluation process included that competition between buyers has led to strong sale prices being achieved for quality properties. Demand for coastal areas is coming from out-of-town buyers. Mid to high value properties have sold with relative ease, although require a longer marketing period.
The report also said there is evidence of low-end, poor-condition properties being bought and renovated, then on-sold for a profit with a quick turnover and two-bedroom units are proving very popular with buyers.
In line with national trends demand for retirement village living is increasing, along with demand for childcare and doggie day-care services.
Demand for commercial property is good, retail vacancy has decreased and there are more co-working offices in Whangārei. The Port Road area is becoming popular for mixed use, commercial and industrial, due in part to the new bypass, and land values have risen in the central business district.
A mix of buyers has resulted in a significant increase in values in One Tree Point, Waipu town is attracting retirees, and vacant land in Ngunguru is in short supply.
Properties in the Whangarei District are re-valued every three years. The last re-valuation was completed by QV in 2015. New property valuations are being worked through by Opteon right now and should be released by the end of the year.