New Zealand house prices have grown so much in the past year that homes in many suburbs have earned more per hour than the average Kiwi worker does – much more.
According to OneRoof figures, there are 114 suburbs nationwide where the average property value jumped more than $316,000 over the last 12 months - the equivalent of more than $36 per hour.
Top of the table was New Zealand's most expensive residential suburb Herne Bay, in Auckland, where the average property value rose $653,000 to $3.677m over the last year - about $74 per hour.
Snapping at its heels were Auckland's Remuera, where the average property value jumped $618,000 in 12 months ($70 per hour), and Waiheke Island, where the gain was $602,000 ($68.7 per hour).
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The 12-month gain for all of New Zealand was $212,000 - or $24 per hour.
The highest earning region was Auckland, which enjoyed a 12-month gain of $282,000 - the equivalent of $32.2 an hour - but not all suburbs in the city earned at Herne Bay’s high rate, with one, Auckland CBD, earning just $5.48 per hour.
The Wellington region’s hourly gain over the last 12 months was just under $30. Earning the least was West Coast, where the 12-month jump of $65,000 to $353,000 was the equivalent gain of $7.42 per hour.
Of the other major metros, Queenstown Lakes came out on top, with an hourly gain of $34.93 over the year pushing its average property value to $1.598 million. Tauranga’s hourly gain over the year was $32, Hamilton’s was $21 and Christchurch’s was $17. Earning the least was Dunedin, where the hourly gain over the year worked out to be just $13.36.
And those hourly earnings may well grow again, particularly at the top end.
Ray White Remuera agent Steve Koerber, who with his wife Nila Koerber sold 88 properties in the last 12 months, told OneRoof that spring would see a new burst of even higher prices.
The Covid lockdown ordered last month has seen many homeowners delay bringing their properties to market, but once restrictions are lifted listings will flow through.
Koerber said: “There are about three times more buyers than usual who are cashed-up and ready to buy. The supply will be reasonable, but not enough and there’ll be some really interesting auctions.
“Prices will be high, but [auctions are] the only way we can do it.”
A buyer who hadn't seen inside the house paid over the asking price of $4m for a four-bedroom house on Shore Road, in Remuera, Auckland. Photo / Supplied
The couple said that unlike some parts of Auckland dominated by development sites, Remuera vendors would not go to market without getting their homes staged, gardens and pools groomed and professional photos and videos done.
“There’s going to be a real blockage in the market. We’ve got plenty of vendors getting ready, but there’s no real distress of buyers forced to sell up.”
Where there are properties on the market, Koerber says buyers are using lockdown to beat the competition.
Last weekend weekend the Koerbers sold a four-bedroom, mid-century house and pool in double grammar zone that had gone live on the Thursday after lockdown. The buyer, who paid over the asking price of $4m for the Shore Road home on over 1142sqm of land, had not seen inside, but decided to jump the queue of some 30 or 40 other buyers who had lined up to view the house once allowed in at level 3.
“I presume he must have poked his head over the fence. He put a contract on subject to due diligence, then decided to go ahead anyway. He didn’t want to have to fight all the other people once we go to level 3. He knew it needed updating and took the risk.
“The house had been on the market just as the investor rules changed in March, so we priced it above what it had been back then and we had three offers."
Barfoot & Thompson branch manager Carolyn Vernon expects that post-lockdown “we’ll see a selling season that we’ve never seen before.”
Two bidders had not been inside a house on Benson Road, Remuera that sold under the hammer for $2.751m - $876,000 above CV. Photo / supplied
She said even in the last week her office sold nine properties at auction and another two by negotiation and buyers still out-number sellers.
“Prices won’t go up as much as they did in November and December last year, but they’ll still go up – not quite to the levels [after lockdown] we’d seen before.
“There’s a big shortage of double grammar zone [homes], $3m to $5m – especially now we're back to waiting lists at private schools and you can’t get your kids in.”
Scott Kirk, branch manager of Bayleys, says that buyers kept going through lockdown after a July and August that didn’t show any typical winter slowdown.
“Some places managed one, maybe two, open homes. Purchasers know that might be the last opportunity so they get into gear and pursue aggressively. Days on market dropped and we had some really strong prices achieved.
“We had two bidders at a Benson Road auction who’d not seen the property, but typically they’re not looking at the value of the improvements [house] but the land.
“FOMO is still there for purchasers, they’ve missed out before. We will have increased supply after lockdown, but it will be offset by the strength of demand.”
