Buyers trying to find affordable homes in the hot Auckland property market are best to settle in the central city.
According to the latest data from OneRoof data partner Valocity, it is the only part of the city where median property values are below $500,000.
Auckland Central is the most affordable place to buy, as its median value for December reached $490,000 compared to wider Auckland’s $1.21million.
Valocity’s head of valuation innovation, James Wilson, says the value growth in Auckland is driven by two regions: city central and Papakura, which are up 11.2 per cent and 10.2 per cent respectively.
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The Auckland housing market isn’t showing signs of slowing down, with more suburbs joining the million-dollar club, Auckland central apartments remain the easiest path way into Auckland property ladder this year?
Director of Ray White city apartments, Danel Horrobin, says the city will always remain affordable comparing to other suburbs.
Affordability is a big factor to first home buyer’s and investors’ activity, he says.
“This year we will also see a bigger demand from investors coming into the city for affordability as we have good supply there but I think prices will start to rise on that side of the market throughout the year,” Horrobin says.
A one-bedroom apartment with a carpark in the city can cost under $500,000 and has lot of interest from first home buyers.
He says more the compact, and often lease hold, apartments are sold to investors, who are also very active in the central city.
Apartments of around 20 sq m in the 72 Nelson Street apartment complex are selling well, with good rental returns. Photo / Supplied.
“We were getting returns of about 14 er cent on lease hold properties this year with good cash flow opportunities for investors,” Horrobin says.
One of the Ray White agents selling in apartments in the city, Adam Gurr, says it is the most affordable area to secure property in 2021.
However, Gurr is sure that even that affordable apartment market will rise in value, putting his estimate at five to ten per cent growth in the next year.
“Normally, wherever there’s a boom in the residential market, which we are essentially in the middle of, it’s inevitable that the apartment market follows the suit in the next 12 to 18 months,” Gurr says.
He adds: “We haven't seen massive surge in prices, however, due to increase vacancy rate and reduced rent expense per week. That’s a result of not having international visitors and international students in the Auckland City.”
Once the borders are open, the apartment market will pick up at the “drastic” pace as people living overseas value the city lifestyle, he says.
City apartment agents are expecting a boost to sales when overseas buyers return to New Zealand as they are used to apartment living. Photo / Ted Baghurst
Right now, about 20 per cent of apartment enquiries come from overseas, which is the highest interest Gurr has seen in a while.
“I have a lot of expats coming back home enquiring because they are used to living in an apartment.”
Valocity’s Wilson says nearly 80 per cent of Auckland suburbs showed growth since the lockdown. Values in just seven suburbs have softened, including under million-dollar Eden Terrace and Grafton.
With housing stock of mainly terrace houses and apartments, Grafton had a drop of 3.7 per cent since the lockdown and has a current median value of $547,000. However, that figure is still up $77,500 from a year ago.
Neighbouring Eden Terrace, site of construction of the new Mount Eden CRL railway station, is less affordable. Its current median value of $700,000 is a minimal tiny post-lockdown drop of 0.2 per cent.
Tt the other end of the scale, Botany Downs the sprawling suburb in south-east Auckland is leading the way in growth post-covid with 20.2 per cent climb in median value to $1.29million.
Closer to town, the rapidly densifying Kingsland, had 19.8 per cent growth. The suburb just ten minutes away from the centre of the city, next to Eden Park, now has a median value of $1.575million, a year-on-year growth of $355,000.
