City Continues to Grow
The Herald has dropped a few articles this morning on the housing situation in Auckland. Rather interesting bringing it up with the Reserve Bank due to start cranking up the Official Cash Rate – the rate that influences your savings and mortgage interest rates.
The two Herald articles are related loosely with one looking at the rise of apartment building while the second looks at first home buyer spots and how that is changing.
Starting with “Revealed: City’s affordable spots” we see that traditional first home buyer locations in South and West Auckland are no longer becoming favourable for them. Places like Papakura as noted still have decent homes (like our first home Rebekka and I live in) going for $360,000 – $400,000 but even they are starting to disappear fast. The road I live on has an average turn around of a house going from sale to sold of about six weeks so you need to be fast (and have realistic expectations – none of this Champaign tastes on beer budget crap that is often seen). Otherwise it is off to Weymouth or waiting for the Wesley Special Housing Area for your first house. Mind you going out to Wesley even when the new Paerata Station is built will mean around just over an hour commute with the motorway being even more with the amount of recent cock ups/accidents happening on it if you plan to work in the CBD rather than local.
From the NZ Herald
Revealed: City’s affordable spots
By James Ihaka 5:30 AM Monday Mar 10, 2014
New areas are on the rise as prices in Auckland’s former first-home hunting grounds climb out of reach.West Auckland and parts of South Auckland are no longer an easy leg up on the real estate ladder as prices continue to rise throughout the region, a new report says.
But other suburbs like Silverdale and Weymouth are becoming good bets for first-home buyers, says the quarterly Property Report, in today’s Herald.
The average house price in Titirangi, West Auckland, is now $656,850 – 26 per cent higher than in 2007 – meaning a $132,000 deposit is needed just to get a look in. Further south, suburbs such as Hill Park in Manurewa and Goodwood Heights have also climbed, with the latter’s average price going up 24.4 per cent to $619,00.
The Government and Auckland Council are speeding up the planning and consent process to meet the demand for affordable housing and work has started on several major projects with the aim of delivering at least 5000 new homes a year.
The report, which uses QV figures, has highlighted a number of developments on the outer fringes of the urban area where house prices are lower than elsewhere.It says bus-only lanes on the Northern Motorway have made living in places like Silverdale a more realistic option, while the upgrade of suburban rail and bus hubs such as at Panmure and the imminent arrival of electric trains were raising the appeal of nearby suburbs.
Ray White Papakura owner Ted Ingram said housing was rising fast in in South Auckland.
A development near Wesley College at Paerata would be the site of at least 4500 new homes to be built over a 15- to 20-year period. In Weymouth, about 280 houses overlooking the Manukau Harbour are planned. Some will cost between $325,000 and $475,000.
Mr Ingram said he was amazed at hearing how people couldn’t afford their first home.
“I can get you in one for $350,000 to $400,000,” he said.
“It can get you a three-bedroom home built in the 1960s with a garage but with no ensuite and no fourth bedroom – young people have to realise these days they have to start where we started.”
…
So as I noted earlier things are on the rise at the moment. There are transport upgrades coming through such as electrification and the South Auckland Bus Network (from next year) which will make accessing home, work and school easier. But we also have the risk of disjointed development if either our infrastructure does not get built fast enough or our Metropolitan Centres and industrial complexes go out of kilter for whatever reason. Meaning too much residential and not enough job centres. Or infrastructure not able to move people between work and home efficiently and in an affordable manner.
Continuing from the Herald article
The head of hometopia.co.nz, Stephen Hart, said people will still want to live close to town and consider apartment living but satellite suburbs were also being considered.
“The transport systems are likely to improve to these outlying suburbs and they can get a house and section we only dreamed about – we can’t even do that in Mt Wellington or Panmure now.”
He still thought places like Papakura and Whangaparaoa were too far for most city workers to consider. “Some people are doing it but it’s not a trend, in my opinion.”
The report’s writer, Tony Verdon, says the newly developed areas will not appeal to all younger buyers, many of whom would prefer to live closer to Auckland’s centre.
“But increased pressure on Auckland prices will force many to these newer developments on Auckland’s expanding urban fringe.”
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Yes satellite suburbs are being considered. They are your Metropolitan Centres that are set out in the Unitary Plan which support higher density living and work while being on main transit spines across Auckland.
As for Papakura being too far for CBD workers? Well I am sure 43 minutes on the new Electric Trains from December compared to 90+ minutes on the Southern Motorway (accidents are becoming to common) will be a nice appetiser for you. Fail that the Manukau South Link when it gets built means Papakura to Manukau City Centre in 14 minutes by train so working closer to home could be an option. It is all there we just need to keep our eyes on the prize.
Looking at the second article: “Property Report: Moving on up: The rise and rise of Auckland’s apartment market” it outlines the surge in apartment building in Auckland are a lull starting in 2007.
Again from the NZH:
Property Report: Moving on up: The rise and rise of Auckland’s apartment market
By Tony Verdon 5:30 AM Monday Mar 10, 2014
Why Auckland could soon be be a city of vertical villages as more Kiwis embrace high-rise living.
The Auckland apartment market is looking up. More than 150 apartments are now sold every month in central Auckland, with the post GFC slump in the market fast receding. And the sector is finally shaking free of the shackles that had caused potential buyers to hesitate. Issues surrounding poor management of apartment buildings, leaky building worries, the cost of earthquake strengthening and post-earthquake insurance hikes have largely been addressed.
Tighter body corporate legislation giving owners more transparency about the way their apartment blocks are managed is helping to underpin greater confidence. The heated residential property market has boosted fortunes too, with the price of a stand-alone home in a desirable inner-city suburb now way beyond many buyers, making apartments a more attractive, or necessary, alternative.
Infographic: Click here to view Property Report’s QV data.
Also driving growth is the fact that Auckland is the favoured destination of immigrants to New Zealand, many of whom are used to living in tower blocks overseas and prefer the vibrancy of more crowded inner-city living rather than stand-alone suburban life. Returning expatriates, too, are happy to buy an apartment, having experienced the
benefits when living overseas.As Auckland’s population increases so the range of apartments spreads, and already there are large apartment projects in suburban areas such as Manukau, Ellerslie, New Lynn, Mt Wellington and parts of the North Shore.
Higher density living is provided for in the Auckland Council’s Unitary Plan, which provides for zones where terraced housing and apartments can be built. Controversial though these planning changes have been, it is difficult to escape the need for Auckland to start moving skywards instead of continuing to sprawl. Some of this future development has already taken place around railway and bus transport hubs. Once the apartments sprout up, along with them come retail and food outlets and amenities, creating new communities.
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The rest of the said article goes over the risks and rewards of apartments whether building, renting or own one.
What we are seeing and despite the NIMBY’s kicking and screaming otherwise is the market (although distorted until the Unitary Plan eventually corrects those distortions) is the market catering to what is being sort after – within reason. Some people are quite happy to live in apartments while others in stand alone houses. I have always held the belief the market should be freer, the NIMBY’s silenced, and planning rules liberalised to cater for what people want and the City to continue to evolve to those people’s wants. I do not tolerate people who treat the City as a museum piece and will through just about any means available stall the continued evolution of Auckland.
It is expected too to see apartment developments outside of the CBD such as Manukau, Mt Wellington, New Lynn and Ellersile. Two of those places are Metropolitan Centres so they support high-rise buildings any how while the other two are in favourable locations and close to mass transit lines. Although with Ellersile we have a Councillor quite determined not to allow multi storey resident development in her Ward despite the market which she is meant to be supporting as a Nat wanting the opposite she purports.
It is all go in Auckland with City Building. The main challenge is going to be make sure it is not all disjointed as it has been in the past. Will our leaders lead and our managers manage so that Auckland does become a better Auckland.
Talking Southern Auckland 