Almost a third of Auckland homes are now valued at more than $1 million, as new estimates show the proportion of "affordable" homes in the super-city has tumbled dramatically in seven years.
The new CoreLogic valuation estimates as at July 1 show there are now more Auckland homes worth at least $1 million (135,000) than the 91,000 homes below the "affordable" cap for KiwiSaver HomeStart loans, which was raised this month to $600,000 for existing homes.
Homes under the $600,000 limit have plunged from 78 per cent of all Auckland homes in July 2009 to 21 per cent last month, while those over $1 million have soared from 5 per cent to 31 per cent.
Labour leader Andrew Little, who requested the new valuations, said they showed graphically how the affordable end of the housing market had almost disappeared in our largest city.
He visited a development in Weymouth yesterday, where all 170 homes built so far have cost under $535,000, to demonstrate what he said could be done under Labour's proposals to build 10,000 new homes a year, half of them in Auckland, and to bring development sites together through an Affordable Housing Authority.
"The KiwiBuild and Affordable Housing Authority policy is based on using as much available Crown land as possible, and also working with developers where they have projects," he said.
But Housing Minister Nick Smith said the Weymouth developers were only able to build homes cheaply thanks to a $29 million grant from a Government subsidy scheme that has now been abolished.
He said that was about $100,000 for each of the 295 homes in the subdivision.
"If Labour wants to model its policy on Weymouth, they should be transparent and open that it comes at a cost to taxpayers of $100,000 per home, which means their policy of building 100,000 homes over 10 years would cost $10 billion, not just the $2 billion they said it would cost," he said.
Little responded by saying: "We reject Nick Smith's assertion there is a subsidy at Waimahia or in Labour's Kiwibuild plan. Waimahia had a $29 million capital injection to get it started, and the consortium intends to re-invest that amount when the development is complete. It is not a subsidy to the home buyers there."
CoreLogic estimates the Auckland residential property index has almost exactly doubled since the bottom of the global financial crisis in June 2009, up from 1269 to an estimated 2534 last month.
The index rose 15 per cent in the past year alone.
The bubble is still slightly smaller than the last big leap in the index, which rose by 106 per cent in the seven years to June 2007. It fell in the two years after that by 7.5 per cent.
All homes 'affordable' in Weymouth
Developers of the Weymouth housing project have pulled off a feat that no other Auckland developer can boast of - every single house sold so far is officially "affordable".
Project manager Greg Freeman says 67 of the 170 homes completed so far on what was once the farm of the Weymouth children's home have sold on the open market for under $535,000, well below the official "affordable" limit of $578,250 or 75 per cent of the Auckland median house price.
The other 103 homes have been retained as long-term social rentals (28), rent-to-buy (36) and shared-equity homes (39) where the developers - the Tamaki Collective representing Auckland iwi, the Maori Trustee, the NZ Housing Foundation and CORT Community Housing Community of Refuge Trust - and other social agencies still at least part-own the homes.
Within five years, rent-to-buy tenants such as Melissa Moore and her partner Watene Atama are expected to join the shared equity schemes and become part-owners of their homes.
Perhaps 10 years after joining the schemes, the part-owners are expected to be able to buy out the developers and own their own homes with their own mortgages.
Atama, a mechanical engineer, and Moore, who works part-time for a Manurewa waste reduction project, said they could never have got on to the home ownership ladder if they hadn't got into their Housing Foundation home.
"We were paying $560 or $580 a week rent in a really crappy damp cold house," she said.
With four children aged from 10 to 3-year-old twins Maia and Max, they had built up debts which they have to pay off before they can take the next step towards part-owning their home. But that is much easier in their brand new four-bedroom home where the rent has only just gone up from $400 to $412 a week.
"We are paying off our debts," Moore said. "We also have to put aside $20 a week for a deposit."
The Housing Foundation, established by philanthropist Sir Stephen Tindall, will chip in 25 per cent of any increased value of the house from the time the family moved in a year ago until they become part-owners. So far the value has risen from $462,000 to $550,000, so on paper the family already has $22,000 towards that deposit.
Moore also chairs the Waimahia Inlet Residents' Association and organises events such as sausage sizzles for residents to get to know each other.
"We live super-close," she said. "I pretty much know quite a lot of the people that live here."