Sign In / Register
Real estate firm owners agree that a buyer frenzy has dramatically driven up prices in Mahurangi. Desperate buyers have been left out of luck as property owners have become reluctant to sell – for fear of not being able to find another house to buy. The area is attractive to buyers because of its coast and country lifestyle, its proximity to Auckland and the soon to be opened Puhoi to Warkworth motorway. Low interest rates have also meant there have been plenty of buyers with access to cash. Meanwhile, regulatory changes, including Healthy Homes Standards and the bright line tax, have done little to temper skyrocketing values. Mahurangi Matters spoke to seven real estate heads to get a snapshot of the current market.
Terrence Banks,
Ray White, Warkworth
Terrence says surging prices have made it difficult to set a starting price on a property. “Often each sale forms a new benchmark for the next,” he says.
Auctions now make up a much higher proportion of sales compared to “private treaty” sales. They have a 90 per cent success rate.
Terrence says every bit of housing stock he lists get sold. In previous years, around one in four properties listed might sell.
“We have between 40 and 50 potential buyers through an open home in four weeks.”
However, this winter has seen a pronounced dip in listings due to dwindling stock. Ray White’s listings are down by half compared to the same time over the last two years.
In part, this is thanks to bumper sales earlier in the year. Ray White sold 50 per cent more homes for the year to date compared to last year and 39 per cent more than 2019.
“Sellers have come to market and gone. There is a hole in supply now.”
Another factor impacting dwindling supply is families settling in the area and buying a house without selling one, essentially consuming stock.
Terrence says the new ‘work from home’ culture has made Warkworth a more attractive proposition. “Five years ago, buyers might not have considered it, but many choose to work in Auckland and live here.”
Ben Kloppers,
RE/MAX Realty Group, Warkworth
Ben says that in 20 years of being in real estate, he has never witnessed a better time to sell in Mahurangi.
“Frustrated buyers are evacuating Auckland in anticipation of the good life in Rodney, away from the crowds,” he says.
He says as an international company RE/MAX is also getting enquiries from expats in England, USA and Australia.
Ben’s concern is for those at the margins of affordability, including young people and the elderly. He says impending increases to capital valuations (CVs) will have the most impact on elderly residents who live in now high-value coast properties. Council rates increases may force them to sell.
“Where will they go? There is not much in the way of standalone properties for retirees in the area. The prices are ripping families apart,” he says.
Ben says that with an entry level purchase price of $750,000 in Mahurangi, first home buyers will likely have to look further north.
Meanwhile, the bright line rules and increased regulation for rentals has taken the shine off investment in rental properties.
“We envisage major problems ahead for renters as aging investors lose their desire to own properties and cash in on high sales prices.”
Mark Macky,
Bayleys, Warkworth
Mark says Bayleys’ auction stats are “through the roof”. He is consistently getting strong pre-auction offers, and then strong bidding on top, resulting in record prices.
Where buyers were once driven by FOMO, Fear of Missing Out, they are now being driven by a more dramatic phenomenon – Fear of Not Finding Anything, or FONFA.
“Vendors are reluctant to sell as they are worried they won’t be able to find anything else to buy. This is not a healthy dynamic, and a good agent will recommend strategies to overcome this.”
Mark doesn’t believe that recent regulatory changes by the Government have been positive.
“The Government has been playing whack-a-mole with the property market rather than implementing well thought policy that will make a genuine difference,” he says.
“As a result, it is harder for first-home buyers to compete in the market, while those with strong balance sheets, who operate at the higher end of the market, are still flying.”
Mark believes that low interest rates will be available for the next three to five years.
He acknowledges that to afford a mortgage in Mahurangi, workers will likely need to commute to Auckland, but says that will change as the district grows and commercial and industrial land opens up.
“In the meantime, mum and dad are putting up with the commute for their family to be part of a special community and a brilliant quality of life. Who can blame them?”
Amy Wagstaff,
Harcourts, Warkworth
Amy says to buy in this climate, buyers need have pre-approval from a bank and put documents in front of their lawyers as soon as they see a property. “Good agencies will already have a LIM report, a title and Council documents on file. It’s about looking over them fast enough.”
She says often auctions unexpectedly get brought forward. The norm is now two weeks from listing to auction.
In terms of rising values, Amy points to Leigh as the next big opportunity. She says it is ripe for investors, still affordable and yet to be properly discovered.
She likens it to Omaha, which had properties for sale in the $900s five years ago that now sell for $1.5 million.
Another major growth area is Kaipara Flat, due its close proximity to the end of the Puhoi to Warkworth motorway.
Amy says although interest rates are likely to increase, they will still be at historical lows. “When I bought real estate in 2005, interest rates were above 10 per cent. They were 21 per cent in the 80s.
“Even if rates go up a per cent, we are still spoiled for interest rates. It’s a great time to buy.”
Amy says for those trying to enter the market, properties with consent issues offer a competitive opportunity if they can be addressed.
She says unconsented structures such as decks, sleep outs and sheds are common in Rodney.
Wellsford still offers affordable opportunities. It is much more affordable than towns of the same distance from Auckland in the south.
Rick Law,
Mike Pero, Warkworth
Rick says the last 12 months have been the busiest he’s ever had. He’s sold a property each fortnight. “I’ve been flat out. At one point, I had 11 listings on the market.”
He says it has been cheaper to borrow to buy than to rent, thanks to low interest rates.
Rick adds that even if interest rates rise by two per cent, it is still likely that mortgages will be cheaper than rents in Snells Beach and Warkworth.
Rick believes that recent mortgagees are unlikely to find themselves in trouble once rates do increase. Banks evaluate mortgages against future rate increases of at least six per cent before making a decision to lend.
He says banks also look favourably on the Mahurangi area. Six years ago, the average house in Warkworth was $420,000. Houses have doubled in value since then.
Mehran Zareian,
Barfoot and Thompson, Warkworth
Mehran agrees the seller’s market is likely to continue in the short term with low stock and low interest rates.
He says that one impact of the new Healthy Homes Standards for rentals is that investors are looking at “build to rent” as an option.
New homes are built to standard and come with a 10-year master builder guarantee that make the prospect and attractive long-term investment.
He says speculators are already taking advantage of the motorway nearing completion and even old houses on freehold land are exceeding price expectations.
Barfoot & Thompson’s auction success rates have reached 90 per cent.
He believes that delayed updates to CVs will likely see rises of 10 to 13 per cent above current values.
Steffan Meyer,
Meyer Real Estate, Snells Beach
Steffan’s advice to buyers is to get in touch with an agent as soon as they have their financial ducks in a row, even if they don’t have a specific property in mind.
“We often do deals that don’t go to market if I am able to match a property with a buyer in my database.”
He says at present the best investment opportunity is to buy a blank lot and build a house on it to add “instant equity”.
“An existing house is dead market value, but building a house takes away an inconvenience. It will be more modern and lower maintenance.”
Steffan says Warkworth is about to be inundated with new development, with significant tracts of land owned by large companies that will soon come on the market.
“I would say in the next two to three years we will be doing pre-sales for those.”
In the meantime, his advice to first home buyers is to look for sections without covenants, where they are free to place a relocatable house while they save up for a build.
