South Auckland suburbs have been spearheading a value growth boom as investors and first-home buyers compete for properties.
CoreLogic ranked suburbs to see which had risen the most in median value during the 12 months to December 2015, based on its E-Valuer estimates of median values*.
Senior research analyst for CoreLogic NZ, Nick Goodall, says: "The main point of note for the top ten suburbs is that they are exclusively in South Auckland, either Manukau or Papakura."
The suburbs making the top ten ranking were Weymouth (up 32 per cent), Clendon Park (up 30.5), Papakura (up 29.7), Red Hill (up 29.2), Opaheke (up 28.4), Randwick Park (up 27.9), Clover Park and Manurewa East (up 27.8), Manurewa (up 27.5) and Rosehill (up 26.7).
Goodall says: "These suburbs are at the lower to middle part of the value range in Auckland. This is relatively typical of a fast-increasing market -- the lower end of the market tends to grow the most when a market is doing well.
"This is due to generally having more competition in this part of the market. First-home buyers and investors are the most active in this value range."
Colleen Milne, chief executive of the Real Estate Institute, says increased popularity of areas such as South Auckland and West Auckland over 2015 could be seen as the early stages of the "halo effect".
"Areas close to central Auckland became too expensive for first-home buyers and investors so they began to look further out from the central city and eventually into other regions such as Northland and Waikato/Bay of Plenty."
The multiple property owners or investors helping fuel these South Auckland suburbs' value growth made the biggest share of property purchases throughout the Auckland region in the year to December 2015.
"They accounted for 3 per cent of sales in the Super City in this period," says Goodall. "In Clendon Park, number two on the list of suburbs with the greatest growth in 2015, multiple property owners bought 44 per cent of all sales there."
Two investors who own multiple properties in these hot "top ten" suburbs believe appeal is being driven more by other suburbs becoming unaffordable than new facilities attracting buyers to areas.
The vice-president of the Auckland Property Investors Association, residential landlord Peter Lewis, was ahead of the pack when he bought the first of several Randwick Park properties seven years ago.
"I started buying there on the basis that you look at areas which are going up in price, which Papatoetoe was, and buy next door. Initially some people said 'what are you doing; you wouldn't go out there with a gun' because it had a bad reputation. But now, in around 18 months, some of those properties will have increased in value by 40 per cent."
Manurewa East investor-landlord Sharon Trafford has increased the rent on the three Manurewa East home-and-incomes she owns along with a bungalow.
She says buying in Manurewa East was motivated by "the figures not stacking up in Papatoetoe and West Auckland where I'd been looking".
She favours cashflow-positive properties but reckons there are still plenty of traders buying South Auckland properties to on-sell. This is despite investor loan-to-value ratio restrictions, the new two-year bright-line test for speculative capital gains and forcing non-resident investors to disclose their identities.
Trafford, who deals with investors as she also owns renovation and property management firms, says, "It's like a cock fight frenzy down there at the moment. These guys are caravanning in groups, out looking at properties every day and watching Trade Me at 1am when the listings tick over."
In 2015 first-home buyers accounted for 2 per cent of sales in Papakura and 23 per cent in Manukau, higher than the 2 per cent of sales they drove across Auckland Super City, says Goodall of CoreLogic. "In Weymouth, where we saw the greatest growth last year, the figure is 32 per cent."
Loan Market mortgage adviser Bruce Patten says: "We're seeing young couples living in, say, Howick who'd like to buy there but can't afford it but still want a property so buy in these areas in Manukau and Papakura."
Goodall says analysis of sales price to CV shows first-home buyers, who are more emotionally driven than investors, often buy at a slightly higher premium to get into the market.
"For example in Auckland for 2015, first home buyers paid on average 1.24 times the CV, while movers paid 1.21 and multiple property owners 1.22. It seems a slim margin but it illustrates their willingness to go that little bit higher."