$1m Housing Value on Auckland Isthmus is Nothing to Be Proud Of

It does have serious repercussions across Auckland

I picked up a Bob Dey – Property Report highlighting average housing values on the Auckland Isthmus (so Central Auckland) hitting the $1 million mark (according to Quotable Value).

From Property Report:

Repercussions spread as average Auckland house value tops $1 million

Auckland’s steaming housing market continued to press upward in June. The average value of a house on the isthmus, according to Quotable Value Ltd’s house price index for the region, topped $1 million.

That’s an average of all developed residential properties, not just an average or median sales prices.

QV said the shortage of supply meant speculation was rife, landbanking of development sites was increasing, the discount on cross-leased property had been eroded and Aucklanders were fanning out into other regions looking for property.

QV’s index for the Auckland region rose 5.5% over the last 3 months, 17% over the year, to be 53.7% ahead of the last peak at the end of 2007. Adjusted for inflation, the annual gain was almost the same at 16.9%, while the rise since 2007 was 31.9%.

QV’s latest monthly national index has risen 3.6% in 3 months, 9.3% in a year to be 25.6% above the late 2007 peak. Adjusted for inflation, the annual rise fell to 9.2%, but the net increase from 2007 was 7.8%.

QV national spokesperson Andrea Rush said: “Large numbers of Aucklanders are flocking to buy property in Tauranga, Hamilton & the western Bay of Plenty, resulting in rising values in these areas.

……

Below are the latest average values & index shifts over 3 months, 12 months and since the 2007 peak, plus sales in the latest 3 months, for Auckland on the old council boundaries plus Kaipara to the north, the Auckland region, Hamilton, Tauranga and all New Zealand:

Kaipara, $350,907, 1.5%, 4.2%, -11.5%, 65
Rodney, $730,774, 3.3%, 8.4%, 24.6%, 525
North, $740,723, 3.9%, 8.5%, 23.3%, 236
Hibiscus Coast, $722,321, 2.8%, 8.3%, 23%, 289

North Shore, $988,124, 5.6%, 15.9%, 53.1%, 1264
Coastal, $1,128,224, 5.2%, 15.1%, 49.7%, 565
Onewa, $803,207, 6.5%, 18.8%, 61.9%, 441
North Harbour, $946,419, 5.5%, 14%, 55.8%, 258

Waitakere, $670,454, 7.1%, 19.4%, 58.1%, 885
Auckland City, $1,003,144, 5.1%, 18.3%, 61.1%, 1884
Central, $862,943, 4.4%, 15.4%, 51.5%, 518
East, $1,254,506, 4.9%, 17.4%, 57.4%, 571
South, $915,976, 6.1%, 21.4%, 70.2%, 746
Islands, $825,724, -0.6%, 12.7%, 29.2%, 49

Manukau, $699,425, 5.7%, 17.1%, 52.8%, 1641
East, $917,703, 5.4%, 14.7%, 54%, 564
Central, $534,266, 7%, 17.6%, 42.1%, 426
North-west, $585,259, 5.4%, 20.2%, 58.4%, 598

Papakura, $511,075, 6.3%, 18.5%, 42.1%, 260

Franklin, $518,827, 4.8%, 10.6%, 31.2%, 210

Auckland region, $840,165, 5.5%, 17%, 53.7%, 6868

Hamilton, $381,793, 2.2%, 4.4%, 5.6%, 594

Tauranga, $485,561, 4.1%, 7.3%, 0.8%, 678

Total NZ, $520,585, 3.6%, 9.3%, 25.6%, 18,541

………

Source and full post: http://www.propbd.co.nz/repercussions-spread-as-average-auckland-house-value-tops-1-million/

This has repercussions across Auckland and south of Auckland for sure. But the rise in Isthmus values to $1m averages does have serious repercussions across Southern Auckland.

Why?

Southern Auckland is considered cheap, considered a good place to get a first home, and has a strong sense of community. However, the South also has social deprivation higher than anyone likes and incomes not quite there compared to the rest of Auckland.

Situation?

Money (and people) coming out of the Isthmus to the nominally cheaper South pushing up values faster than one would expect to occur “naturally.” While this in itself is a good thing as it will attract investment and the rise of amenity the problem is values rising this fast illustrates more structural problems.

Structural problems such as apparent lack of housing supply (whether it be detached single houses, terraced houses, or 18-26 storey apartment towers in Manukau) on the back of a growing problem. This continues to fuel value rises faster than normal and we get people locked out of both the housing AND rental market as prices move to “meet” the (constricted) market.

Being locked out or even being caught in the values rises means more income spent on housing and less on other necessities such as food and clothing. Given that Southern Auckland has a social deprivation issue already in terms of housing and low incomes the situation on the Isthmus hitting $1m in average values is certainly nothing to be proud of in a hurry.

It then asks the question whether the Unitary Plan that is due to go live next year will be able to address the structural issues in terms of housing supply (via planning rules). In its current form before the Panel that answer would be a clear NO! If amended to how various submitters want it through amendments that liberalise the Plan and expand some of the higher density residential zones across Auckland) then we might just have a chance in getting things back under control.

As there is nothing worse than being locked out of your own home – your own City!