House prices leap past valuations

Council valuations are already out of date, with homes selling in Auckland's overheated property market on average for more than 15 per cent above their figure of six months ago.

And previously unfashionable suburbs such as Mt Roskill, Mangere East, Otahuhu, Mt Wellington, New Lynn, Papatoetoe and Manurewa have recorded some of the biggest spikes as desperate buyers look for their first home.

Mt Roskill made the biggest jump in the Real Estate Institute figures, which are based on Auckland sales in February and compared against capital valuations made in July last year. The valuations, which do not involve a property inspection or include chattels, were made public on October 1.

Even suburbs among the 10 with lowest rises, such as Remuera and Te Atatu Peninsula, were up 13 per cent.

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Properties sold by Bayleys Real Estate last month included a West Harbour home bought for $700,000 more than its capital valuation of $900,000 and a Glendowie home with a capital value of $1.13m that sold for $1.575m. An Avondale home sold for $590,000 — $130,000 above valuation.

REINZ chief executive Colleen Milne wasn't surprised because city fringe suburbs were now out of reach for many. The hot market made it hard for capital values to keep up, Milne said.

"There has been a 19.9 per cent median movement in Auckland in the last 18 months. I thought the CVs seemed to be quite appropriate at the time, but the whole thing is just supply and demand — we have a lack of houses," she told the Herald on Sunday.

"We need at least 10,000 [new homes] a year and we're not keeping up."

Measures such as the housing accord, proposed changes to the Resource Management Act and the unitary plan would right the balance, but it would take a couple of years.

Homes under $550,000 — the new Auckland cap for KiwiSaver HomeStart grants — were still available in Mangere East, Papakura, Henderson, Massey and Glenfield.

Bayleys research manager Ian Little believed Auckland's housing pressures would continue to rise. "Current drivers will remain in place — migration, the shortage of housing, low interest rates."

The Property Market director Antonia Baker reported it had sold properties for a third over capital valuation. "In the last six months, oh boy, has the market moved on."

$1.7 million and worth it

Roger Adshead searched Sandringham, Mt Eden and Mt Albert to find his new home. Photo / Michael Craig
Roger Adshead searched Sandringham, Mt Eden and Mt Albert to find his new home. Photo / Michael Craig

Roger Adshead bought his new house for almost double its capital value — and he couldn't be happier. "It's absolutely beautiful," Adshead said of the century-old Sandringham villa he and his wife Tracy took ownership of on Thursday.

The couple paid $1.7 million for their new home. The Burnley Tce house had undergone a huge renovation since the latest capital valuation of $870,000 in July last year, he said. Valuations were carried out in July and made public three months later.

He thoroughly researched the market and consulted experts including a building inspector and a valuer, buying the house after five weeks of an "intense sweep" through properties in the $1.5m to $2m range in Sandringham, Mt Eden and Mt Albert.

"They were all beautifully done up apart from one, but this was the best. It's worth every dollar. My wife thinks we got lucky."

The villa has five bedrooms, two living areas and "two-and-a-half" bathrooms.
It boasts new piles, insulation and central heating. "The sale price doesn't really tell the whole story. It's a new house.

"The only bit that remains is the front left hand gable."

They bought the house after making the highest bid at auction — and even that was $50,000 below the reserve, he said. The price reflected the explosive property market, said Adshead.

Top 10 hotspots

Suburb — Premium

• Mt Roskill — 26%
• Mangere East — 25%
• Albany — 24%
• Te Atatu South — 23%
• Otahuhu — 22%
• Mt Wellington — 21%
• New Lynn — 20%
• Papatoetoe and Mt Eden — 19%
• Manurewa — 18%