Auckland’s property market is slowing, with prices deceasing in the past few months, however 10-year data from real estate agent Barfoot & Thompson puts the scale of the crisis into a severe perspective.
The company’s top 20 list for the fastest rising suburbs across 10 years is topped by Takapuna with a 197 per cent rise in median price, from the first half of 2007 to the first half of this year.
The list makes the challenge for first-home buyers more troublesome.
It includes a wide cross-section of Auckland suburbs, including traditionally cheaper areas such as Favona in South Auckland and Glen Innes in the east.
Glen Innes was the third biggest riser, up 167 per cent – from $445,000 to a median of $1.14 million.
Favona was seventh, rising 146 per cent from $339,000 to $835,000.
The cheapest suburb on the list was Weymouth in South Auckland – in twentieth position – with a median sales price of $676,000, up 121 per cent from $369,750.
Previously affordable areas such as Pukekohe, Glen Eden and Ranui have also rose over the decade.
Auckland’s market has reached its apogee and has been cooling in the past six months.
Barfoot & Thompson monthly statistics showed the average sale price in June dropped 3.1 per cent compared to the average for the previous three months, and was only 0.6 per cent higher than it was 12 months ago.
Barfoot & Thompson managing director Peter Thompson said that while there had definitely been a sharp change in the market over the past few months, he felt some of that was seasonal and some of it might be uncertainty about the election.
Economists have also revealed the Reserve Bank’s loan-to-value report restrictions and tighter lending practices by the major banks as possible causes for the slowdown in Auckland.
But there is a prevalent agreement that population growth, driven by the immigration boom, will create a floor in the Auckland market.
Statistics NZ data showed net migration numbers totaled 72,305 in the year to June 30, up from 71,964 in the year to May 31, and another record in an upward trend since 2012.
Much has also been made of the slow progress in housing development to keep up with the growth.
While Auckland is experiencing a building boom – June figures show 10,379 homes were consented in the year through May, up 10 per cent from the previous year – that figure is still short of the numbers required to meet demand.
Thompson said the strong growth market, particularly in the past few years, had been different to other booms.
Previously, the growth had been strongest in more up-market suburbs whereas this burst had been more evenly spread across Auckland.
He looks at areas like Glenn Innes, and he believes it’s going to be one of the biggest growing areas for some time.
With what the Government are doing, that is an ideal area to develop for the low, high and medium price brackets.
A lot of the areas that had seen strong development in the past few years, putting new quality homes on the market, had also seen good growth, in his opinion.
Areas like Takanini, where Housing New Zealand had been developing new homes, were also coming through strongly, he said.
What they are trying to do is to create all-price sectors within one suburb and that’s one pleasing sign that they are catering for everyone.
Several areas on the city outskirts had experienced big rises, including Pukekohe and Beachlands.
The southeastern satellite suburb of Beachlands topped the top 20 list for price growth in the first six months of this year.
Also Beachlands had seen a lot of development completed in the past year, including a new shopping centre and work on the town center.