House boom - rise of the $1m suburbs

The suburb of Herne Bay has again topped the table with an average value of about $1.8 million. Photo / Brett Phibbs

Westmere is newest member of an exclusive club, but Herne Bay is still leading the charge.

Eleven Auckland suburbs now have average house values of $1 million or more - and New Zealand could have its first $2 million suburb by Christmas.

Auckland's soaring house market has been highlighted in new figures given to the Herald, showing Westmere, Ponsonby and Devonport are the latest suburbs to join the $1 million club, alongside eight others.

The number of million-dollar suburbs is now higher than at any time during the previous housing boom.

PropertyIQ - part-owned by QV - valued every house in each suburb based on recent sales of nearby comparable properties to find an average, although there are many properties that would fall below the figure.

The suburb of Herne Bay has again topped the table, with an average value of about $1.8 million - a rise of 10.5 per cent since last year.

Other areas on the list this year include St Marys Bay, Parnell, Epsom, Stanley Pt, Remuera, Takapuna and Mission Bay.

Herne Bay's neighbouring suburb Westmere had the biggest increase, with average values rising 12.9 per cent to $1,065,000.

Auckland businessman Grant Nola and his former Bulgarian tennis pro wife Pavlina last week sold their bungalow on William Denny Ave in Westmere for $2.25 million - $350,000 above its council valuation of $1.9 million.

They made a $1,318,000 profit - less the undisclosed amount spent on extensive renovations at the 942sq m property - since buying the house in 2009 for $932,000.

The original 234sq m house was moved to the rear of the large section which is shielded from the street by a double garage, and adjoining 84sq m studio.

The couple have said they are looking to move to the country with their two sons.

Westmere real estate agent Ross Brader said that when he started selling in the area in 1996, the median house price was $318,000.

Then, the area drew mainly first-home buyers, but it was now attracting a different market, including professional couples, families looking to upgrade or New Zealanders returning from overseas investing in rentals.

"There are very few homes cross-leased or subdivided in Westmere - a lot of the homes are on sections of about 420 to 460sq m and they don't have shared driveways.

"They're all nice cute character bungalows. The area's had a lot of renovation done over the last 20 years so it's looking very good."

PropertyIQ research director Jonno Ingerson said Herne Bay became Auckland's first million-dollar suburb in 2003.

It was soon joined by St Mary's Bay in December 2004, then Parnell in April 2005. The number grew throughout the property boom, reaching 10 suburbs in January and February 2008.

It dropped to three - Herne Bay, St Marys Bay and Parnell - in June and July 2009 before picking up again.

"So far we have never had a suburb worth more than $2 million average value," Mr Ingerson.

"Herne Bay is the closest at nearly 1.9 million, but for the last few months values there have stabilised a little after increasing throughout 2011.

"If values pick up again in Herne Bay and increased at the same rate as they had been then the $2 million mark may be crossed in three or four months."

Wellington does not have any $1 million suburbs.

Seaside Lowry Bay broke the mark in early 2008 but has slipped back to the mid $900,000s.