After steep house price falls, which once-unaffordable suburbs now offer the best buys?

The latest market research from property research firm CoreLogic shows that the current property market downturn has dealt a heavy blow to house prices in some of New Zealand's upmarket suburbs. Prices have fallen sharply in many residential areas nationwide, with particularly striking declines in some sought-after locations that were once out of reach. This has created a rare buying opportunity.

 

CoreLogic chief property economist Kelvin Davidson recently said that over the 12 months to 1 March, median house prices in 10 suburbs nationwide fell by NZ$300,000 or more, with most of these being upmarket suburbs that were once highly sought after by buyers. These include Seatoun, Southgate and Karaka Bays in Wellington, and Westmere, Saint Marys Bay and Orākei in Auckland.

 

In Greater Wellington, which recorded the largest falls, Seatoun's median house price dropped by NZ$389,800, Plimmerton's by NZ$359,950 and Southgate's by NZ$333,150.

CoreLogic's chief property economist, Kelvin Davidson

 

Davidson believes upmarket suburbs often record larger house price falls because their prices were already relatively high before the upswing, leaving more room to fall. He explained that economists tend to focus on percentage declines. Median house prices can provide some indication of price movements in a suburb, but they do not represent changes in every property's value. This means that in suburbs with large dollar and percentage declines, some homes for sale will have fallen further in price than the suburb's median. His team therefore looked at several of the hardest-hit suburbs in Wellington and Auckland and used asking prices on Realestate.co.nz to identify properties that could offer buyers the best value at present.

 

Wellington

 

Seatoun is one of the Wellington region's most expensive suburbs and has also recorded the largest fall. Its median house price is NZ$1,747,900, and CoreLogic's figures show it also recorded the largest dollar decline among suburbs nationwide. The median fell by NZ$389,800, or 18.1%, from NZ$2,137,700 a year earlier. On 17 March, just 12 properties were listed for sale in Seatoun, with around half displaying an asking price.

This Seatoun property is on the market at a price well below the suburb's median

 

The three-bedroom home pictured above on Breaker Bay Road was built in the 50s of the 20th century. This seaside home faces the beach and has sea views, a double garage and a workshop on a 1007-square-metre section. Its asking price is just NZ$995,000, well below both the suburb's current median house price and its council valuation of NZ$1,630,000.

 

Another property listed in the suburb is a renovated three-bedroom home on Khyber Road. It offers pleasant harbour views and two parking spaces on a 1482-square-metre section, with an asking price of NZ$1,395,000. Recent nearby sales include a two-bedroom home on Marine Parade for NZ$930,000 and a three-bedroom home on Dundas Street for NZ$1,540,000.

Plimmerton in Porirua recorded the second-largest dollar decline in median house prices, with its median falling from NZ$1,299,200 a year earlier to NZ$939,250, a decline of 27.7%, or NZ$359,950. There are currently 12 properties listed for sale in the suburb, again with around half displaying asking prices.

 

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One representative property on the market is a four-bedroom home on Sunset Parade, built in the 70s of the 20th century. It has a garage and a sleepout on a 499-square-metre section, with pleasant sea views and the beach directly opposite. Its council valuation is just NZ$970,000, considerably below the suburb's median house price last year. It last sold in 1986 for NZ$83,000.

 

Another listing worth watching is a three-bedroom home on Corlett Road, on a 2817-square-metre section, with an asking price of NZ$895,000. Recent nearby sales include a three-bedroom property on Moana Road for NZ$800,000 and a four-bedroom property on The Track for NZ$705,000.

 

 

Auckland

 

In Auckland, the popular suburb of Westmere recorded the largest dollar decline in house prices, with its median falling by NZ$324,950, or 11.1%, to NZ$2,606,450, compared with NZ$2,931,400 last year.

 

 

On 17 March, Reaestate.co.nz had 21 Westmere properties listed for sale, although most did not display an asking price. The three-bedroom home pictured above on Wellpark Ave was built in the 20s of the 20th century. It includes a double garage, a separate garden studio, a swimming pool and a hot tub. Its asking price of NZ$2,495,000 is well below the suburb's median house price and its council valuation of NZ$2,875,000. The current owner bought it in 2003 for NZ$219,000. A recent sale in the suburb was a three-bedroom property on West View Road, which sold for NZ$1,800,000.

 

Clover Park in South Auckland recorded the city's largest percentage decline, with a change of -16.6%, or -NZ$163,000, over the past 12 months. Its median house price fell from NZ$986,700 last year to NZ$823,100. There are currently 21 properties listed for sale in the suburb, with most sellers displaying asking prices. For example, a three-bedroom property on Chamade Place, built in the 1970s, occupies a 714-square-metre section with two sleepouts and a garage. Its current asking price of NZ$779,000 is below both the suburb's median house price and its council valuation of NZ$830,000. It last sold in 1991 for NZ$96,000.

 

 

Another three-bedroom home on a cross-lease title on Mataura Place is listed for NZ$770,000, while a further three-bedroom home on a 600-square-metre section is on the market for NZ$980,000. Recent nearby sales include a three-bedroom home on Ultima Place for NZ$900,000 and a three-bedroom home on Diorella Drive for NZ$870,000.