Another 56 join the club! Million-dollar suburbs are nothing unusual in Auckland
Auckland is the city Chinese people most like to call home in New Zealand, with its pleasant climate, convenient lifestyle, plentiful job opportunities, and many Chinese restaurants and supermarkets. But Auckland’s house prices are hard to love. The latest figures show that the number of suburbs across greater Auckland with median residential property values in the ‘million-dollar club’ has suddenly jumped by more than 50.
The latest property value figures from OneRoof and its data partner Valocity show that, as the new year begins, more than 50 additional Auckland suburbs have joined the ‘million-dollar club’, with median residential property values exceeding NZ$1,000,000.
Driven by low interest rates and a buying frenzy, Auckland’s housing market remained red hot through the final three months of 2020. By the end of 2020, 179 of the 279 greater Auckland suburbs tracked by OneRoof had median property values above NZ$1,000,000, an increase of 45% compared with 2019. This means buyers face high property prices in almost two-thirds of the city’s suburbs.
The 56 suburbs newly joining the million-dollar club recorded an astonishing average increase in property values of NZ$220,000 over the past 12 months, almost NZ$50,000 above Auckland’s average annual increase.
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New members of the million-dollar club include Mangere Bridge, Glen Innes, Onehunga, Glenfield and Point England, areas where property values had previously remained relatively low. Buyers now need to pay between $1,010,000 and $1,210,000 to enter these markets.
Ellerslie, close to central Auckland, recorded the largest increase among the new entrants. Over the past 12 months, its median property value rose from NZ$960,000 to NZ$1,380,000, an increase of 33%. Unsworth Heights on the North Shore recorded the smallest increase over 12 months, with its median value rising 12%.
In 2020, just one suburb across the city went backwards, dropping out of the million-dollar club by a narrow margin of ten thousand New Zealand dollars. Glenbrook, in Franklin, saw its median house value fall 3% over the past 12 months, from NZ$1,025,000 to NZ$990,000.
Ray White agent Adam Thompson is not surprised by the sharp rise in property values in parts of South Auckland.
‘We’re seeing a huge influx of buyers into the area, up fourfold on a year ago, but there aren’t enough new listings coming onto the market,’ he said.
He also believes low interest rates and current lending conditions have attracted large numbers of buyers over recent months, with buyers now able to borrow twice as much as before.
‘People realise that mortgage payments are equivalent to paying rent. If they could previously borrow NZ$1,000,000, they can now use a loan to buy a property worth $2,400,000. So prices rise, demand outstrips supply, and competition in the market keeps intensifying.’
Onehunga has traditionally been regarded as a working-class area, and its surging property values reflect, to some extent, the enormous changes in Auckland’s housing market. Its median house value is now NZ$1,120,000, up 26% year on year.
Glenn Baker, owner of Bayleys’ One Tree Hill branch, said Onehunga was becoming increasingly popular with buyers, while existing homeowners were also investing in upgrading their homes.
A few years ago, a property selling for NZ$2,000,000 in Onehunga was a rarity. Such sale prices are now commonplace.
Baker said substantial sums were being invested in renovating older homes, which were then put back on the market at higher prices.
‘Many homes in Onehunga are expected to be upgraded within five years, possibly in as little as a year or two.’
‘First-home buyers will either have to pay more or look elsewhere.’
Baker’s business also covers the Mangere Bridge housing market. He said waterfront homes there could sell for as much as $2,500,000, while a typical two-bedroom apartment remained affordable at around $650,000.
‘Many buyers are looking at this area because they can afford it, and Mangere Bridge’s market is very hot. It may offer better value for money than other suburbs close to the city centre.’
He added: ‘When a suburb’s property market changes like this, its popularity is the main factor driving prices up. As more young families move into a suburb, their friends and family are also encouraged to follow.’
Earlier OneRoof-Valocity figures showed that, by December 2020, 11 greater Auckland suburbs had median property values above NZ$2,000,000, compared with just 3 a year earlier. Herne Bay firmly held the top spot and was on track to become New Zealand’s first suburb with an average property value above NZ$3,000,000.
The suburb’s current median house value is NZ$2,955,000. Over the past 12 months, its average sale price has soared by NZ$660,000, equivalent to around NZ$1800 a day.
