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Auckland Property Market Research August 2017
Suburb Review - Central Auckland
Average Central Auckland rents remain well above the average for the greater Auckland region (Pukekohe to Rodney). Over the past 12 months, Central Auckland 3-bedroom rentals had an average weekly rental price of $679, 13% higher than the average greater Auckland 3-bedroom rental of $603. 2-bedroom rentals in Central Auckland were 9% higher with an average rental price of $516, compared to $474 for greater Auckland.
Looking at the individual suburbs, rental prices for 3-bed properties saw the strongest growth in the City Centre, Mt Eden and Remuera (26%, 17% and 15% respectively) while the weakest growth was in Epsom (2%). Meanwhile for 2-bed properties growth was strongest in Ponsonby, One Tree Hill and Remuera (11%, 10% and 10% respectively), while the Grey Lynn/ Westmere, Meadowbank and City Centre saw declines (-7%, -3% and -2% respectively).
Median Sales prices continued to rise across Central Auckland over the past 12 months. Mt Albert saw the largest increase in sales price of the Central Auckland areas (up 16-points). Eastern Suburbs sit well above the other suburbs in Central Auckland in terms of sales price; the average sales price here being $1.6 million compared to the second highest, Mt Eden at $1.2 million. However, the median price in Mt Eden remained mostly stable over the past year (1% increase) while Eastern Suburbs rose 13%.
Average Sales volume fell across all Central Auckland suburbs over the past year following a general trend in the Auckland property market where more investors are choosing ‘sit tight’ on their property assets. City/ Pt Chev and Mt Roskill had the largest decreases in sales volume over the past year (falling 26% and 25%, respectively). The opening of the Waterview Connection may well see Point Chevalier prices rebound in coming months.
Residential Property Investor Profile
As seen in previous waves, the majority of property investors surveyed in the Crockers Property Investment Index (CPII) Survey in association with IPSOS regard their residential investment portfolios to be part of their retirement savings plan (up 5-points to 79%), while a sizeable proportion consider their property investments as general nest-egg savings (48%). There has been a substantial increase in the proportion of investors who chose property over other investments for its tangibility since Jul ‘16 (up 16-points to 68%), which leads over other considerations like safer returns (36%), helping others (30%) and better returns (29%).
More than two-thirds of investors stated that their residential property investments
provide them with a supplementary income (up 15-points from Jul ’16). The proportion for which investment property is the main source of income has fallen substantially (from 25% to 13% this year).
Crockers Property Investment Index
This month the Auckland Rental Property Investment Index has softened, reflecting a decrease in the proportion of investors who are planning on making ‘no change’ to their portfolio along with an increase in the proportion of investors planning to reduce the size of their property investments. The Auckland Rental Property Performance Index improved this month following a sharp decline in June. This is a result of an increase in the proportion of investors who feel that their investments will perform ‘the same’ over the next 12 months coupled with a decrease in the proportion who feel their investments will perform ‘worse’.
Auckland Sales and Rental Update
Auckland Median Prices and Sales Numbers
Reversing what appeared to be the start of a long-term trend, the median sales price
rebounded in June from $835,000 to $845,000, 3% higher than at the same time last year. However, the year-on-year increase is considerably smaller than 2016 (which saw a 9% increase) and 2015 (which saw a 26% increase). Meanwhile, the sales volume has fallen from 2,399 to 1,879, a 31% decrease since the same time last year. This reduction in sales volume may well be helping prices stay steady.
Auckland Rental Prices
Over the past month average Auckland rents for a 2-bedroom residential property
have remained stable at $482, while 2-bedroom rents across New Zealand have
slightly decreased from $390 to $380. This has resulted in the Auckland 2-bedroom
premium increasing slightly from 23% to 27% in June.
Average rents for 3-bedroom properties in Auckland increased slightly this month
from $620 to $630, while rents across New Zealand remained stable at $450,
resulting in the 3-bedroom premium increasing slightly from 38% to 40%.