Consumer Watch: Look for a hidden bargain

By Susan Edmunds

Still plenty of options available in our overheated property market

Kenrick Smith and wife Jasmine bought in Greenlane, and will rent it out when they buy a larger home. Photo / Jason Dorday
Kenrick Smith and wife Jasmine bought in Greenlane, and will rent it out when they buy a larger home. Photo / Jason Dorday

Look south, get an apartment or buy near a supermarket, say property experts who insist there is still good buying in Auckland's overheated housing market.

Many would-be homeowners have found themselves priced out of the market as property values have soared. But agents told the Herald on Sunday that there are areas with reasonable prices — and room to grow.

Harcourts chief executive Hayden Duncan said South Auckland offered opportunities.

The area was likely to experience further price rises because of its good public transport links. "It's still, in our view, undervalued compared to the inner city."

Graham Viall, director of Harcourts' Papakura, Manurewa and Pukekohe offices, said those areas' prices were about 20 per cent above their 2008 peak, compared to 30-40 per cent across the rest of Auckland.

"There's still a margin to be made in the south. We haven't really had a boom yet."

Real Estate Institute chief executive Helen O'Sullivan said if she were buying her first home now, she would consider Papakura or look even further south, to Karaka.

"What you can get for $600,000 to $700,000 compared to closer to the city, is a big difference."

Commentator Olly Newland said Otahuhu, Mt Wellington and Ellerslie had potential, as did Whangaparaoa and Warkworth.

"The city can only expand south or north. They will be the new outer suburbs. Those are the areas I'd go for."

Peter Thompson, of Barfoot and Thompson, still expected more price increases in Onehunga.

"The one I've always been maintaining has to take off at some stage is Onehunga. It's now like what Herne Bay used to be like."

He said Onehunga was central and had good schools. "It's an oyster waiting to be opened."

Thompson also believed buyers could look west and north. Te Atatu, Hillcrest, Birkdale and Beach Haven offered good value.

"They're becoming very popular with buyers around the $400,000 to $600,000 mark," he said.

For others hoping to make long-term capital gains, commentator Alistair Helm advised looking in areas where there is development.

A good sign of future demand was a new supermarket, he said, as the big chains identified future growth spots well before property developers did.

"When you hear Pak'n Save is looking to acquire a bit of land, it's good to buy next to there," he said.

Countdown GM Property Adrian Walker said the chain was building in Westgate, Hobsonville and Mangere East. "These are all parts of the city where we're either responding to population growth or anticipated growth."

Others believe first-time buyers should skip standalone houses and look at the apartment market.

Auckland Property Investors Association president Andrew Bruce said: "If you look at house prices, a big chunk of that is land value. Yes, there's the argument that land is what appreciates but if you are wanting to get into the market, a lot of people would be quite surprised what you can buy under $300,000."

He said buyers should go for bigger apartments. Banks are reluctant to lend on those that are less than 40sqm.

"Apartments may not get the same capital gains but you're in the game — you've got something. More and more people will end up gravitating to the apartment market."

Antonia Baker, director of real estate agency The Property Market, agreed small was the way to go — but said people should look at units in good suburbs.

"Look for a brick-and-tile unit or cottage as close to town as possible."

They could then make the most of the suburbs' capital gains when they wanted to move to a house, she said. "Don't compromise on location too much."


A stepping stone to bigger things

Kenrick Smith and his wife, Jasmine, had been looking for a property in West Auckland, thinking it would be the best place to get a property for less than $600,000.

They wanted space for a dog and three or more bedrooms.

But the commute put them off, so they started looking at units closer to town. They recently bought a two-bedroom property in Greenlane and plan to rent it out when they buy a standalone house.

"We had to decide whether to buy a family home in Titirangi or a rental and we did the rental first.

"We're young and it's doable. If you're young, it makes sense, you want to be close to your friends and the pub."

- Herald on Sunday

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