Auckland Property Insight July 2019
Suburb Review – South Auckland
Average rents across South Auckland remain below the average for the greater Auckland region (Pukekohe to Rodney). Over the past 12 months, South Auckland 3-bedroom rentals have had an average weekly rental price of $534 – well below the average for Auckland 3-bedroom rentals at $640. Similarly, 2-bedroom rentals in South Auckland average at $442 compared to $504 for greater Auckland.
Looking at the individual South Auckland suburbs, rental prices for 2-bedroom and 3-bedroom properties have grown between 2% and 6% over the past year. The largest shift in 2-bedroom rental prices over the past 12 months has occurred in Pukekohe (6%), whilst the largest shift in 3-bedroom rental prices has occurred in Papakura (4%), Mangere (4%) and Manukau (4%).
Over the past two years there has been a notable plateau in sales prices in the South Auckland region. Eastern Beaches (-2%) and Papatoetoe (-2%) have experienced decreases in the average sales price in the past 12 months, whilst Papakura (1%), Dannemora–Clover Park–Flat Bush (1%) and Manurewa (4%) have all experienced slight increases.
Sales volumes have been decreasing in the South Auckland suburbs over the past 4 years, but this year they have remained fairly stable when compared with last year’s figures. Papakura has witnessed the largest decrease (-12%), whilst Eastern Beaches, Papatoetoe and Dannemora–Clover Park–Flat Bush have all had 1-point fluctuations in average sales volume in the last 12 months.
Crockers Property Investment Index
The Auckland Rental Property Investment Index has suffered a decline this month as a result of an increase in those looking to divest coupled with a decrease in those looking to invest in the rental property market.
Meanwhile, the Auckland Rental Property Performance Index has increased to reach its highest point since Apr-18, as a result of a continued decrease in those who believe the performance in the market will deteriorate.
Apartment Management & Investment Options
This month in our latest CPII survey in association with IPSOS, we asked investors about apartment management and investment options below is their response.
Professional Property Management – Most Preferred for Investment Apartments
When buying an investment apartment, a property management company remains the preferred option for the majority of investors. This year there has been a slight decrease in those who prefer to manage an investment apartment by themselves and an increase in those who prefer a property management company.
In interpreting these answers, we have to bear in mind that as the sample was sourced from Crockers’ newsletter recipients, a bias towards preferring property managers is expected.
Most Important Factors in Buying an Investment Apartment
The most important factors when buying an investment apartment are location (50%) and body corporate levies (17%).
Body Corporate Factors
The level of body corporate levies (45%) is the most important factor for investors when becoming part of the body corporate, whilst being a recognised company is the next most important factor (19%).
Auckland Sales & Rental Update
Auckland Median Prices & Sales Numbers
The median sales price for Auckland residential properties increased from $856,000 in Apr-19 to $860,000 in May-19, sitting at a slightly higher point than the same time last year. This is the first time the median price has been higher than for the same time a year prior since December 2018.
This month, the sales volume has exhibited the normal seasonal increase; however, it remains at its lowest point in the past 5 years for the month of May. This fall in volume is likely to have contributed to the increased median sales price.
Auckland Rental Prices
The average Auckland rent for 2-bedroom residential properties increased from to $513 in Apr-19 to $521 in May-19, while the average 2-bedroom rental across New Zealand remained at $430. This has resulted in an increase in the Auckland 2-bedroom premium.
The average rent for 3-bedroom properties in Auckland increased from $645 in Apr-19 to $650 in May-19, whilst the 3-bedroom rental prices in New Zealand remained at $500. This has led to a further increase in the Auckland 3-bedroom premium this month.