ANALYSIS: Outside of Auckland, there are numerous towns and cities where you can easily buy a home for less than $500,000. In Auckland, that’s a hard ask.
The median house price for the city has for the last 12 months been hovering around the $1 million mark.
For many Kiwis, this is an unachievable figure. Separate data from Infometrics shows that while housing affordability in Auckland has improved since market peak, the ratio of house prices to household incomes in the city is 7.7 (in Christchurch the ratio is 6.6).
But there are properties available in Auckland for less than the median house price (at the time of writing, there were 113 houses for sale on OneRoof with a search price of less than $500,000).
Start your property search
The median is the middle point and so there is a range of property prices in any given month. But buyers should beware, the distribution of prices isn’t even.
In August, Auckland’s median house price was $960,000, but the bulk of sales took place in the $800,000 to $900,000 price band. Also, more properties sold in the $700,000s than those in the $900,000s.
So, don’t think that you need to spend $1m to get a home in Auckland. There are opportunities for those on a tighter budget.
Apartments tend to be cheaper than standalone houses and townhouses, so it won’t come as a surprise that 71% of the properties sold in Auckland for less than $500,000 over the last year were apartments.
Opes Partners economist Ed McKnight: "Houses under $500,000 are harder to come by in Auckland, but that doesn’t mean they don’t exist." Photo / Fiona Goodall
More than half of the sub-$500,000 sales were in Auckland Central, where there is a high number of apartments. Parnell and Grafton - both strong on apartments - had the next highest share of sub-$500,000 sales. followed by Papatoetoe and Mount Eden.
While seven out of 10 sub-$500,000 sales were of apartments, that means three out of 10, about 33 a month, weren’t.
For example, a three-bedroom standalone home on Marr Road, in Manurewa, sold in May for $490,000, and a renovated two-bedroom unit on Astley Avenue, New Lynn, sold for $460,000. They’re not four-bedroom architectural wonders in Herne Bay, but that’s why they sell for around a tenth of the price.
Discover more:
- Tony Alexander: What the OCR cut means for house prices and your mortgage
- Street jammed with cars as 'dream Lotto' house brings out the neighbourhood
- There's only a handful of streets the rich and famous want to live on
It’s worth bearing in mind that cheaper properties often have drawbacks or features that would put some buyers off, such as a high body corporate fee or the fact it’s leasehold, not freehold.
On that last point, 12% of Auckland properties that sold for less than $500,000 over the last 12 months were leasehold.
The purpose of this column isn’t to say that properties are cheap. Or that good-quality cheap properties are easy to find.
As with all purchases, you can’t judge on price alone, you need to think about what you’re getting for that money.
But first-home buyers shouldn’t get scared off by the median house price. No one should be thinking: “The median house price is $960,000, and I don’t have $960,000 to spend, so it’s not worth looking.”
Houses under $500,000 are harder to come by in Auckland, but that doesn’t mean they don’t exist.
- Ed McKnight is the economist at property investment company Opes Partners
- Click here to find more properties for sale in Auckland
