The suburbs that have pocketed the most

Auckland’s richest suburbs are even richer, despite a global pandemic resulting in two lockdowns in the country’s biggest city.

Herne Bay, arguably the wealthiest suburb in the land, has seen a $740,000 dollar value leap over the past five years – with $270,000 of that added in the past year alone.

READ MORE: Find out if your suburb is rising or falling

The median value for a Herne Bay home is now $2.66 million, compared to $2.39 million a year ago, according to the latest OneRoof Property Report figures.

Nipping at Herne Bay’s heels is neighbouring St Marys Bay which has seen a $525,000 five-year capital gain, followed by $410,000 for Ponsonby, $385,000 for Westmere and $295,000 for Grey Lynn.

The big gains are no surprise to top Bayleys Ponsonby agent Edward Pack who has a waiting list of buyers wanting to get into high value homes in Herne Bay.

All these inner west suburbs are small and while homes are tightly there is an ever-growing demographic of people wanting to move in, Pack says.

“One in three properties I sell are to people from outside these areas, so they might be coming from Remuera or Devonport or other areas of Auckland, who are choosing to live in these suburbs for the lifestyle and to live in more vibrant and urban locations.”

Helicopter pads and boat sheds

Pack sells a lot of properties in Herne Bay which he describes as an exceptionally special suburb.

“It’s very small, tightly held and out of all the houses on the northern slopes of Herne Bay, 85 of the properties sit directly on the water.

A helicopter hovers above a water-front home in Herne Bay. Photo / New Zealand Herald

“A lot of these properties have direct beach access, some I’ve sold have their own boatsheds and some have helicopter pads which allow a certain demographic of person an incredible lifestyle that would be hard to find in any city in the world.

“You’re ten minutes from your office in the city and you can come home and paddleboard with your kids from your residential address.”

Pack has a number of people “itching” to get into quality waterfront properties and says the demand has definitely increased.

“There’s just a wide demographic of people that come from all walks of life that want to live in these suburbs. St Marys Bay is again an incredibly tightly-held pocket of Auckland.

“A lot of the properties are beautifully renovated character houses or newly built homes that have some of the most world class city views in Auckland so it’s no surprise properties do see really good capital growth.”

Young families love Westmere because of its proximity to Coxs Bay, where they can get slightly bigger properties on slightly larger parcels of land, but, again, these properties don’t come to market often.

Grey Lynn’s tree-lined streets, villas and cafes are popular with Auckland buyers. Photo / Fiona Goodall

In Ponsonby, which offers great restaurants and is close to the CBD, Pack is seeing a big shift in the types of people choosing to live there, including people coming from across town in Remuera and other parts of Auckland.

“A lot of people are selling up big family homes from other areas and wanting to live somewhere more vibrant and urban.

“I think we’re surprised every day by the new, different people coming in, whether they’re expats returning home or people from St Heliers, or people from the South Island coming up.”

And Grey Lynn, which Pack says has some of the most beautiful tree-lined streets in Auckland featuring early 1900 villas, has great proximity to Grey Lynn Park and also to the city.

“A lot of young families love Grey Lynn. It also has the West Lynn Shops which people love now with great cafes and restaurants. There’s a really good energy to Grey Lynn.”

‘Scarcity factor’

James Wilson, Valocity’s Director of insurance and valuation innovation, says a range of factors are causing the dollar value growth in some of the city’s top suburbs.

“In terms of a five-year window we’re now beginning to see a lot more of home-owners benefitting from things like zoning changes, so suddenly the land becomes that much more valuable in part where there were larger sites.”

And in places like Herne Bay the “scarcity factor” is driving growth.

“As the markets across the country have really only gone in one direction over the last five-year period properties available at that really high price bracket are becoming more and more scarce and that translates to some pretty good growth.

“Along with that we have seen some really active renovation and significant building works occurring across a lot of suburbs across that five-year window.

“That’s fuelled by equity growth which unlocks a lot of that building work. You can borrow against the house to do more work which in turn increases the value of the property across the board.

“The price of borrowing is historically low and, therefore, it becomes quite a viable option to do that, so those factors are driving some pretty rapid dollar value growth in those higher-value area, but the scarcity factor is probably the strongest driver of growth in some of those locations.”

Omaha properties have gained $475,000 over the last five years. Photo / Kellie Bissett

Other parts of Auckland have also shot up, such as Alfriston in Manukau where the current average median value sits at $1.767 million, up $332,000 in a year – and up $407,000 over the past five years.

Wilson notes Alfriston is a small suburb characterised by higher end lifestyle properties meaning a low number of properties and, thus, a low number of sales.

But the composition of what is selling now shows the Covid effect, he says. Five years ago higher end lifestyle properties were not transacting as they are now.

“People almost across the country, especially in places like the main urban centres in Auckland and Wellington, are now seeking out that lifestyle stock because the appeal of a nice home and a lifestyle property becomes that much more real when lockdowns have become par for the course in many countries around the world.”

Pool of buyers

The beach playground of Omaha is another big winner, gaining around $475,000 over five years, which Wilson puts down to the confidence factor.

“You’re seeing five years ago New Zealand’s coastal market, especially the high end one, was relatively healthy but there wasn’t a huge pool of buyers so those really high-end transactions were few and far between.

“Since New Zealand has become a strong success story in terms of Covid, as with Kiwis coming home, that high end coastal property has become really popular as a result and you’re seeing that in the numbers over the last six months with a lot of properties coming to market and a lot of them transacting at really good levels.”

Kumeu, to the north west of Auckland, has made a $375,000 five-year gain, despite struggling with infrastructure.

“One of the key points about Kumeu is it’s had quite a big change in terms of the property types that were around five years ago compared to what are around now, so lots of intensive residential building has been undertaken,” says Wilson.

“The first phase of new-builds were typically higher value homes on larger sites but the most recent phase is smaller dwellings on smaller sites. It might look like the area has had a big change in the value level but in reality it’s the nature of the housing stock that’s been built out there and what’s transacting within that housing stock.”