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Auckland Property Market Research November 2017
Suburb Review: South Auckland
Average rents across South Auckland remain well below the average for the greater Auckland region (Pukekohe to Rodney). Over the past 12 months, South Auckland 3-bedroom rentals had an average weekly rental price of $503, 17% lower than for the average greater Auckland 3-bedroom rental of $609.
2-bedroom rentals in South Auckland were 13% lower, with an average rental price of $416, compared to $477 for greater Auckland. Looking at the individual suburbs, rental prices for 2-bedroom and 3-bedroom properties grew between 3% and 6% over the past year.
Manurewa and Papatoetoe saw an increase in sales price of 9% compared to 2016, the biggest increases in the South Auckland area. Eastern Beaches properties continue to sit well above the other suburbs in South Auckland in terms of sales price, with the average sales price being $1,068k compared to the second highest, Papatoetoe at $750k. However, Eastern Beaches has seen the least increase in sales prices of 5% compared to 2016.
Sales volumes have generally softened across the South Auckland suburbs – except for Papakura and Franklin, where sales volumes are stable compared to 2016. This may reflect the significant new housing builds occurring in these areas, which may be encouraging local homeowners to avoid selling too early lest the areas gain significant value.
Special Housing Areas
This month in our latest CPII survey in association with IPSOS, we asked investors about the Special Housing Areas (SHAs) that were established in 2013. The aim of SHAs is to fast-track the development of additional Auckland housing, with a special focus on affordable housing that can be bought by people who earn the average Auckland wage. Auckland Council data shows 3,157 homes were completed in SHAs by the end of June this year, including 580 ‘affordable homes’. We asked the property investors that we surveyed whether they were aware of SHAs. More than two-thirds of investors were aware of SHAs, while 32% were either unaware or not sure.
We also asked investors whether they had noticed any changes to the Auckland housing market in response to this addition of extra housing stock. Nearly half of investors noticed no change, while 19% noticed slower increases in rents, and 15% noticed smaller increases in house prices.
We asked the investors in the sample what factors they believe contributed most to recent increases in Auckland house prices. The large majority of investors in the sample (78%) consider ‘more people in Auckland’ to have contributed to the increase in house prices, while ‘not enough housing stock’ and ‘low borrowing costs’ were also considered to be contributing factors to this increase (56% and 41%, respectively).
We asked the investors in the sample which political party they believed had the best policies to improve housing affordability in Auckland. Around a third of investors in the sample believe that National had the best policies to improve housing affordability; in comparison, 23% preferred Labour’s policies on housing affordability. Notably 20% of investors were undecided, while 17% preferred none of the political parties’ policies.
Crockers Property Investmet Index
This month the Auckland Rental Property Investment Index has decreased for the second consecutive month. This reflects a continued increase in the proportion of investors planning to divest and declining interest in investors to increase the size of their property portfolios.
The Auckland Rental Property Performance Index has increased, due to an increase in the proportion of investors who are expecting ‘better’ returns on their investments over the next year, coupled with a slight decrease in the proportion of those who feel their investments will perform ‘the same’.
Auckland Sales and Rental Update
Auckland Median Prices and Sales Numbers
The median sales price has remained stable at $830,000 – approximately 1% higher than the same time last year. Meanwhile, sales volume has decreased from 1,916 to 1,679 this month – approximately 31% lower than September 2016.
Auckland Rental Prices
The average Auckland rent for 2-bedroom residential properties has increased slightly this month, from $479 to $484, while the average 2-bedroom rents across New Zealand have also increased from $385 to $395. This has resulted in the Auckland 2-bedroom premium to soften slightly from 24% to 23%.
The average rent for 3-bedroom properties in Auckland has increased slightly from $610 to $612, while average rents across New Zealand have held at $450 – resulting in the Auckland 3-bedroom premium to remain stable at 36%.