Properties based in well-positioned coastal areas lead the way when it comes to value growth across Auckland’s suburbs.
The latest qv.co.nz E-valuer quarterly property report indicates that many coastal areas continue to rise in value despite a slowdown in investor demand, while value growth across central and southern suburbs has slowed.
Northern and central coastal areas, such as the North Shore, contain large sites which appeal to families. This helps enable value growth even when investor demand dips. At the same time, values have remained flat or have dropped slightly in many central and southern areas.
This subdued growth can be partly attributed to a lower expectation of capital gains, which has discouraged many investors from purchasing.
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The economic climate, with low unemployment and interest rates, also means there is less urgency on people selling their property, so any downward trend in prices has been driven mostly by those under some pressure to sell.
In some developing areas, values have eased due to an over-supply of land coupled with low demand. Developing suburbs containing high value stock, such as Flatbush, have been impacted the most when compared with developing areas containing entry-level housing.
This is partly due to entry-level stock attracting more demand from first-home buyers taking advantage of lower deposit requirements for new builds.
With less activity from investors, first-home buyers face less competition. Houses are remaining on the market for longer, giving buyers more time to do due diligence.
Despite this, high values mean these buyers may have to adjust expectations on where they might want to live, in particular moving further from the CBD.
If the goal is to keep a short commute, smaller attached units can offer first home buyers the chance to purchase property below $600,000 in a more central location and gain access to the KiwiSaver HomeStart grant.
It’s a similar story in Wellington, where first home buyers in particular seek more affordable homes on the outer fringes, including the likes of Wainuiomata, Taita and Cannons Creek. These sit in the lower-to-mid value range and have had steady value increases over the past 12 months. Investor activity is relatively high in these regions due to the appeal of comparatively higher yields.
Investors are often in direct competition with first home buyers and this competition is putting upwards pressure on values.
New builds are proving popular, as these are exempt from LVR restrictions. Suburbs such as Woodridge, Whitby, Aotea and Churton Park illustrate this.
Finally, Featherston and Greytown have seen some of the strongest annual value growth across the lower North Island. For the same price, you usually get larger properties than in the city, which is appealing to a variety of buyers.
