The 10 Auckland suburbs picked for house price growth include one of the city's most expensive neighbourhoods as well as one of its cheapest.
Research by development experts at real estate agency Colliers found several locations around the city that are primed to rebound quickly and strongly from the current housing market slump.
These include Albany, Long Bay and Northcross, on the North Shore; Newmarket and Ponsonby in the inner city fringes; and southern and central suburbs Manukau, Mount Roskill, Onehunga, Panmure and Papatoetoe.
Pete Evans, national director of Residential Projects at Colliers, said that following a period of extraordinary growth, house prices in Auckland had suffered a correction as a result of rising interest rates and changing economic conditions.
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However, a mixture of factors including development activity, geographic location and affordability had put some suburbs in a position to see growth at the end of this year and in 2024.
“The focus in 2023 will remain with affordable southern suburbs, the return of amenity-rich, city-fringe suburbs and the lifestyle northern suburbs,” Evans said.
"Inflation, fuel costs, and economic conditions ensure all top 10 picks are within 20km of the Auckland CBD. These central, connected locations will provide good growth in the medium to long-term.”
He added: “Suburb lists from previous years focused on infrastructure changes, transport and government expenditure, but now it’s also about the challenge around building apartment units, what can be built for $5000 per sqm, what big amenity is going in.”
Newcomer to the list, Panmure in south east Auckland, gets the thumbs up because it sits in the middle of the Auckland Manukau Eastern Transport Initiative that will make the old suburb a hub for mixed use and residential development by 2025. Low post-2022 prices make now the time to get into the suburb, Evans said.
Smart apartment developments, such as the OMC, shown here, along with a planned refurbishment of Dress Smart keeps Onehunga on the list of top suburbs for the sixth year running. Photo / Supplied
Demand for luxury apartments is encouraging developers into upscale inner city Newmarket and Ponsonby. Shown here, the Domain Collection in Newmarket. Photo / Supplied
“Amenity will go more up market, demand will be for terraces, infill blocks on big land sections, with car parking,” he said, adding that the slower rate of change in neighbouring Glen Innes also helps Panmure’s appeal.
Manukau’s low house prices and investment by both Panuku and Kāinga Ora to revive the dated 1970s city centre with better housing, retail and jobs, puts that suburb on the list, while the old town of Papatoetoe gets the transport tick, has a good central location and room for terrace houses to replace the old houses on big sections.
Onehunga, which has made every list since 2018, has Evans’ tick again this year because of Australian developer Lendlease's plans for the Dress Smart mall and surrounding areas.
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“Everything they do creates world best practice. Then you’ve got big apartments by good developers. It’s one of our favourites,” he said.
Evans said the analysts had to look hard to find a coastal, affordable North Shore location, before landing on Northcross, midway between Albany and the east coast bays. He maintains that Auckland seaside suburbs are massively under-rated compared to Sydney.
“It’s 20 minutes to the CBD, a first-home buyer has to pay $1m minimum, but if this were Sydney it would be more like $1.5m to $2m, they pay so much more to be close to the water. They know sea and water; it’s still underrated here.”
Large scale redevelopment of Mount Roskill, with an affordable mix of KiwiBuild and market-rate homes has kept the inner city suburb on the top ten list. Photo / Supplied
More upscale Long Bay, right on the water, and the work, retail and university hub of Albany are as far out of the town as Evans allows for easy city access from the north.
In the inner-city ring, Evans’ selection of the upscale inner-city suburbs of Newmarket and Ponsonby this year reflects the fact that wealthy buyers in those suburbs are less susceptible to interest rate hikes. He added Parnell could be included in this band.
Supply is limited and demand is high, which means developers can build apartments for $30,000 per sqm and find plenty of buyers.
“Again, compared to Sydney, Auckland is streets behind for inner-city luxury apartments. Here, we’d get $50,000 per square metre, over there it’s $100,000, all over the city.”
At the affordable end of the scale, KiwiBuild and open market terrace homes, alongside Kainga Ora’s massive public housing build, keeps Mount Roskill on the list. Large scale improvements to water management, via parks, landscaped streams and swales, meant the suburb emerged unscathed from this summer’s flooding, much better off than neighbouring old State housing streets.
“It is the most central, there is no better location. And KiwiBuild taking stock means developers have certainty, and they can offer good value,” Evans said.
“These are suburbs that are best positioned to navigate the array of factors which lead to price growth over time – including the current economic conditions, the aftermath of the Covid-19 pandemic and the effects of the extreme weather events.”
What didn’t make the list are huge greenfields developments miles out of the city, such as the streets of new houses in Westgate/Kumeu/Huapai and Silverdale/Millwater to the north, and the huge planned communities in Drury, Ormiston or Flat Bush to the south.
“The underlying premise is demand versus supply. On greenfields sites there is heaps of supply, but limited demand. Brownfields sites there is minimal supply of new housing, and high demand for places in good central locations,” Evans said.
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