13 Jul 2016

New residents putting pressure on Northland

5:49 am on 13 July 2016

Record migration levels are pushing up rents and putting the squeeze on housing in Whangarei.

Figures just released show net international migration into Northland last year rose by 62 percent - the highest increase on record.

A woman walks with a suitcase through an airport.

Hundreds of New Zealanders are returning home from overseas and moving to Northland. Photo: 123RF

The region gained an additional 809 people from overseas in 2015-16 and 500 in the previous year.

Northland Regional Council economist Darryl Jones said that had reversed almost a decade of net migration losses.

Nearly two-thirds of the new arrivals were New Zealanders, aged between 20 and 40, and coming home mainly from Australia and Britain.

"They've been living overseas for a while and now have decided to come back to New Zealand," he said.

"So that's where the large increase is, but we've also seen a 50 percent drop in the numbers of Northlanders leaving for overseas, as well."

The downturn in the Australian mining industry and the prospect of jobs back home were likely reasons people were returning.

The Northland workforce, both full and part-time had grown by more than 4000 in the past three years, with most of the jobs in construction and manufacturing.

The regional figures also showed that rents in Whangarei had risen by an average 10 percent over the past year.

"The positive net international migration flow into Northland will be having a significant upward movement both on the prices of houses, and of rent," Mr Jones said.

"Obviously there are other factors affecting those markets, like things that are happening in Auckland. But certainly the impact of positive migration will have put upward pressure on prices."

Real Estate Institute figures show house sales in Whangarei  were up 38 percent in May, compared with May last year, and up and 28 percent across Northland.

Real Estate Institute figures show house sales in Whangarei were up 38 percent in May, compared with May last year, and up and 28 percent across Northland. Photo: 123RF

While rents and house prices have increased in Whangarei, there are fewer houses available to rent or buy.

Denis Dixon, of Maggie Dixon Real Estate, said he believed the influx of new people was good for the north and it didn't matter if they were coming from India or Asia or were Kiwis returning home.

But coupled with a steady flow of people moving north from Christchurch and other cities, there was now serious pressure on rental housing stock.

"In the past at any one time, we may have had on our list 20 or 25 properties for people to choose from," he said.

"For the last couple of years we've certainly had less than 10, and often just two or three rentals available."

Auckland investors were buying Whangarei properties; landlords were moving family members in to their rental properties, and tenants were moving around less, which all contributed to the shortage, he said.

Up until fairly recently it was possible to rent a reasonable three-bedroom home in Whangarei for $250 a week.

But that is no longer the case. Rent is now more likely to be well over $300 a week: still cheap by big city prices but the median income in Northland is just under $21,000.

Whangarei's Emergency Housing Trust manager Ange Tepania said in the past many Auckland families had fled the city because of high rents, but the trust was now also seeing rent-refugees from places like Rotorua and Hamilton.

"There is an expectation from some families that by coming here it will be easier and cheaper for them to get a home up here," she said.

"They get up here and find that's not actually the case."

Rental agencies were holding multiple viewings of rental homes, because of the numbers of prospective tenants turning up.

"You may have three viewings for one property because so many are applying," she said.

"It is very difficult for families to be approved as tenants in the private sector and we're talking about working families as well, where one or both parents are working. "

The trust was having to turn away desperate families at the rate of one a day, at its Whangarei base, a former motel.

"We have just taken on a family who've been living in the van with their five children for six weeks," she said.

"It's been horrible for them, especially coming into the colder season."

The family had been using public facilities in Whangarei but had been reported to authorities.

They had moved outside the city for a week, for fear that social workers would remove their children.

The trust was grateful for a recent government grant which had allowed it to lease an extra house to cope with demand.

But it would take 10 houses to accommodate the numbers of homeless families asking for help this winter, Ms Tepania said.

Get the RNZ app

for ad-free news and current affairs