Desperate market: ‘They’ll buy close to a motorway, plaster houses, shared driveways’

They are suburbs buyers in Auckland’s North Shore used to snub but demand for property in the three Bs – Beach Haven, Bayview and Birkdale – has seen prices there soar to new highs.

In the past month agents have sold homes in the previously affordable suburbs well above CV and past a $1 million mark that many, just a few years ago, would have thought impossible to break.

READ MORE: Find out if your suburb is rising or falling

Harcourts agent David Ding told OneRoof he recently sold a three-bed house at 40 Tiri Tiri Road, in Birkdale, for $1.1 million after only ten days on the market, well above the property’s 2017 $800,000 CV.

Another home he brought to market - 3 Gladys Ave, in Bayview – sold for $1.162 million after just 20 days on the market.

Ding spotted the surge in the Shore’s affordable suburbs back in July, as first home buyers targeted properties in the “three Bs” and neighbouring Glenfield, Totara Vale and Sunnyhills.

40 Tiri Tiri Road, in Birkdale, fetched $1.1 million at auction - well above its 2017 CV. Photo / Supplied

“It starts here because Glenfield is the area for most first home buyers, so they try this area first,” he said.

“Sales are almost all auctions now because of supply and demand. And people are compromising on things they’d never have before to get a house – they’ll buy close to a motorway, plaster houses, shared driveways.

“Now with no stock, people are keener, they’ll compromise.”

3 Gladys Ave, in Bayview, sold for $1.162 million after just 20 days on the market. Photo / Supplied

Ding said that properties on cross-lease titles – traditionally cheaper than full freehold sections - were now selling for similar prices as freehold. Even the historic price premium of $200,000 to $300,000 for brick houses over plaster was disappearing.

Lauren Davies, general manager of Ray White Beach Haven, said that median house prices were well up on last year.

Ray White agents sold a character 1910s three-bedroom house at 229 Eskdale Road, in Birkenhead, for $1.082 million, after 171 groups looked through the property and eight registered as bidders. And a 1980s townhouse closer to Birkenhead shops, at 50 Holyoake Place, had nine registered bidders, who drove the price to $1.07 million after 107 groups viewed the property.

She said cross lease homes in the central North Shore suburbs would typically fetch between $750,000 and $830,000 a year ago. Now she expects them to sell for $880,000 to $950,000. A lot of the stock coming to market is “immaculate”, well-done up properties as vendors have taken advantage of low interest rates to add to their mortgages to get a “beautifully done” house.

29 Eskdale Road, in Birkenhead, sold for $1.082 million, after 171 groups looked through the property. Photo / Supplied

“Beach Haven has become a $1 million suburb. [Houses on] full sites are selling for $1million to $1.1 million when we’d been expecting maybe $980,000. A cross lease on a main road that was expecting $850,000 to $880,000 just went for $960,000,” she said.

“There’s desperation with buyers, if they don’t move quickly enough, chances are you won’t see it at next weekend’s open house. It’s buoyant and fast-paced, but it’s exciting because buyers who couldn’t get into a house now get in. It isn't housing affordability, it’s mortgage affordability.”

Hayden Stanaway, Bayleys director of Auckland and Wellington residential, said that Glenfield, one of the Shore’s cheapest suburbs, was late to the 2014-2016 surge but this time around was enjoying the biggest increases, albeit from a lower base.

50 Holyoake Place, in Birkenhead, had nine registered bidders, who drove the price to $1.07 million. Photo / Supplied

At the other end of the scale, in Devonport and Takapuna, Stanaway sees growth being fuelled by returning expats looking in the $4 million to $10 million range. Houses that have sat on the market for six to twelve months were now moving.

Harcourts Milford branch manager Kristina Marmont reports that sell-through rates are almost double last year’s, back up to the 2016-7 market peak, with auction listings up and appraisals on the increase.

“In 23 years in this business, I’ve never seen anything like it. I can’t remember it being this busy, and it’s across the board from $1 million to $1.5 million properties right up to $2 million and $3 million.”

She said that there was less stock in the $4 million to $6 million range, as people didn’t need to sell

“Auctions last month were just what I think as a frenzy. The lead up to Christmas is really exciting”

However, Ding anticipates that increased appraisals this month will turn into more listings after Labour weekend, which will help supply, and maybe even cool auctions.

“Instead of eight or ten bidders at auction, we’ll drop back to three instead because a lot more supply. It’s not back to normal, but it’s better than last year.”