Auckland's property market has bounced back from the slump, with almost half the city's suburbs showing meaningful house price growth, new figures show.
Figures from property listing site OneRoof and its data partner Valocity show that while the country's biggest housing market is still trailing the rest of New Zealand for growth, house prices are starting to move back to levels last seen during the boom.
Among the biggest winners were a clutch of suburbs on the fringes of Double Grammar Zone. OneRoof editor Owen Vaughan says: "Property values in Royal Oak, Greenlane, Three Kings and Kingsland, grew between 5 and 8 percent year on year to end of December 2019.
"The popularity of these suburbs had waned at times during the last 24 months but they rallied towards the end of 2019 as buyers capitalising on low interest rates sought out homes close to the CBD that did not carry the Grammar Zone premium, with properties there typically transacting between $1.2 million and $1.5 million."
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The biggest winner overall for Auckland was Omaha. It was the only Auckland suburb to see double-digit growth, with the median property value there rising 11.8 percent year on year to $1.64 million.
Vaughan says that Omaha was the Auckland's standout suburb, with growth there driven by buyer demand outstripping supply. "Omaha is the place where cashed up Aucklanders want to buy - it's a holiday home suburb that's an easy commute from the city and property there is tightly held. When it does come onto the market, it commands a premium.
"The same drivers apply to Hobsonville, which saw property prices grow more than 5 percent year on year, with the median value for the new-build suburb sitting just under $1.1 million. Demand is outstripping supply."
Kumeu in Auckland's west, and just one suburb over from Hobsonville, saw the biggest drop year on year, with the median value there falling 10.7 percent to $915,000. "The flurry of new developments in what was once a predominantly high price lifestyle property market has had an impact on property values."
The full extent of last year's slump can be seen in the city's central beach suburbs.
Kohimarama’s median value fell 6.2 per cent, from $1.685m to $1.58m, Glendowie dropped 7.8 per cent (from $1.675m to $1.5m), St Heliers was down by 9.4 per cent (from $1.75m to $1.585m) and Mission bay fell 7.3 per cent, down from $1.84m to $1.7m.
"Although St Heliers saw some the country's biggest house sales last year, the market there was bruised as buyers baulked at paying top prices and vendors hesitated to bring properties to market," Vaughan says.
However, the rough year in real estate last year has started to turn around, with agents reporting renewed confidence in the market.
The view over Mission Bay. The suburb struggled last year but things are looking up for homeowners there, say agents. Photo / Getty Images
Teresa Weiss, branch manager for Barfoot & Thompson Mission Bay, says last year was a bit shocking in the market over $1.5m but a number of factors were at play.
“I think the first quarter was probably the roughest and that was because we brought a lot of particularly high end property to the market that the buyers weren’t out there buying and those that were the banks weren’t assisting us in getting things across the line to the same degree,” she says.
The foreign buyers ban from 2018 had an impact and banks tightening criteria made things tough. “We were putting through a lot of conditional sales that weren’t becoming unconditional. Banks had tightened criteria so people that were normally buying at that $1.5m-plus or who had the equity and thought it wouldn’t be a problem to buy something were getting declined,” she says.
But by September the $1.5m and over market had begun to return and the year finished on a high with a good outlook. “What changed? The banks changed, from what we can see. I think people had adjusted to the market."
The low interest rates made it attractive to go back and borrow money again.
“So a combination of fantastic interest rates, banks easing a little bit more and some of those properties coming back on the market and achieving a result giving confidence again.”
Weiss has no doubt good results from late last year will continue this year with a number of properties due to hit the market after Waitangi Day on February 6.
“People get through the two public holidays of Auckland Anniversary and Waitangi and that’s when we’ll start to see the properties hitting the market. We’re doing a lot of appraisals, we’ve got a lot of listings coming up so there’s some good stock.”
Over on the North Shore, the market weathered last year’s storm and with median values rising slightly in areas like Hillcrest, Rothesay Bay, Northcote Point and Takapuna.
In Takapuna, the median value rose 2.9 per cent, up from $1.985m to $2.042m.
Craig Catley, of Ray White Takapuna, says listings across the board were down which increased demand.
“October was quieter than it normally is in terms of the number of listings onto the market.”
The rest of the year was okay but the real problem in the market is there’s not enough turn-over, he says.
“If you look at the volume of sales happening every month other than December, which was up 60 per cent year on year, the volume of sales has been going backwards and backwards for quite some time so that’s probably the thing that’s stifling the market.
“There’s not enough sales happening because there’s not enough listings.”
Also, on the North Shore as property prices have gone up there’s more scope for people to improve what they already have so people look at renovating their house rather than buying something else.
“And the market can almost choke itself in some respects I think because if there’s not enough houses on the market people go ‘I don’t want to sell because I’ve got nowhere to move to’”.
And people may have not have had the same need to sell so hung on to their properties.
But unless stock increases this year, prices will increase, he says.
