Record prices: Your home's new value

Most Auckland areas are pulling record prices, leaving many in the provinces wondering why they're missing out.

The two faces of the North Island property market are reflected in new figures out today that show Auckland prices still largely surging while other cities and the provinces are struggling to reach the boom levels of five years ago.

The median sale price of a home in central Auckland is now $690,000 - slightly up on the previous quarter and 12.5 per cent on the 2007 boom.

Pockets of the city, including Grey Lynn, Pt Chevalier and Sandringham, are now up 23-30 per cent on the 2007 peak, according to the Herald Property Report published today.

"Provincial New Zealand must be scratching its head at the endless headlines of soaring prices," says report writer Bruce Morris.

Prices are still far from the boom levels in nearly every region. Worst-affected areas include Whangarei, where the market is down 18.4 per cent on 2007, Taupo district (-14.6 per cent), Wanganui district (-13.7 per cent), Tauranga district (-9.9 per cent), Hamilton (-8.7 per cent) and Napier (-7.2 per cent).

In the most recent quarter (to September 30) in Auckland, homes in Kelston and Otara led the surge, according to Quotable Value statistics.

Most Auckland areas are pulling record prices, leaving many in the provinces wondering why they're missing out.

One Far North real estate agent describes the coastal market for baches as a disaster. Photo / Supplied The two faces of the North Island property market are reflected in new figures out today that show Auckland prices still largely surging while other cities and the provinces are struggling to reach the boom levels of five years ago.

The median sale price of a home in central Auckland is now $690,000 - slightly up on the previous quarter and 12.5 per cent on the 2007 boom.

Pockets of the city, including Grey Lynn, Pt Chevalier and Sandringham, are now up 23-30 per cent on the 2007 peak, according to the Herald Property Report published today.

"Provincial New Zealand must be scratching its head at the endless headlines of soaring prices," says report writer Bruce Morris.

In the most recent quarter (to September 30) in Auckland, homes in Kelston and Otara led the surge, according to Quotable Value statistics.

Article continues below

The estimated average value for Kelston homes is $360,667, an increase of 9.2 per cent. In Otara, prices have jumped 8.9 per cent to $264,667.

In Green Bay, Glen Innes, Pt Chevalier, Pt England, Hillcrest, Birkdale, Randwick Park and Hauraki average values rose by between 5.5 per cent and 7.9 per cent over the same period.

The worst performer in the Auckland region in the latest quarter was the rich-listers' beachside retreat of Omaha, where property prices dipped 4.6 per cent, bringing the average down to $848,000.

Six of the top 10 Auckland suburbs to lose their value in the recent quarter - Epsom, Warkworth, Golflands (Botany area), Parnell, Onetangi, and Glendowie - did so by less than 1 per cent.

Harcourts chief executive Hayden Duncan said the rises in Kelston and Otara were significant. They were areas that had suffered undervaluation in 2008-2010, particularly because first-home buyers had been less active in that period.

"What we have seen very dramatically ... [is] a massive increase in investor confidence."

Mr Duncan said many of the suburbs that had lost value were desirable locations and the loss didn't reflect buyers' willingness to pay to live in Epsom or Parnell.

Overall Auckland prices would continue to rise because of the lack of incentive to develop, Mr Duncan said. "The existing housing stock just has to do the job."

Barfoot & Thompson managing director Peter Thompson said there was no quick fix to the need to build 10,000 homes in Auckland each year to keep up with the natural population growth.

"While this lack of new builds continues, and with home mortgage rates remaining at low levels, there will be keen interest among buyers for well-presented properties that are priced to market."

Economist Rodney Dickens said the Auckland spurt was a "reasonably decent cyclical upturn," but the stimulus of the low mortgage rates could be wearing off.

He expected a slowing of increases over the next year, probably led by suburbs that had moved the most lately, and then a levelling-off as higher interest rates kicked in.

The news is even less cherry for owners of holiday homes and coastal properties.

One Far North real estate agent describes the coastal market for baches as a disaster as much of the upper North Island faces downward pressure on prices.

The Property Report looks at 23 beach areas, from Raglan on the east coast, north to Paihia and south to Ohope. Just three - Orewa, Red Beach and Oneroa - recorded rises, albeit negligible, while 16 of the others recorded double-digit declines since the 2007-2008 peaks.

Pukehina leads the race to the bottom with a 29.2 per cent decline on average value as assessed by Quotable Value. In 2007, the average value was $511,778; now it's $362,389.

In Paihia, the average value of $417,778 is 26.6 per cent down on the 2008 high of $569,444.

Douglas Wealleans of First National Mangonui estimated prices were back at 2002-2004 levels and it might be another four or five years before they began to move.

"I would like to be more positive, but I'm afraid parts of the Far North are disaster areas at the moment."

By Yvonne Tahana

Published courtesy of NZ Herald Online

Source: NZ Herald Online

Posted: 3 Dec 2012