'Affordable Auckland' a thing of the past

An affordable property in Auckland City is virtually extinct. Photo / Brett Phibbs

An affordable property in the Auckland City area is virtually extinct - with no suburbs outside the apartment-rich areas now below a median value of $600,000.

Figures out in today's QV Property report confirm what many in the market have long bemoaned.

An affordable property is a scarce find in a city where only the CBD ($503,500) and Grafton ($527,650) come in at less than the KiwiSaver first home grant price-cap on an existing property at the end of April.

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In the wider Auckland region a small handful remained; the traditionally affordable south still had four suburbs with a QV estimated median value of less than the $600,000 price cap. There were seven at the end of last October.

Yesterday the Herald on Sunday revealed Auckland's golden quartet of $2 million suburbs - Herne Bay, St Marys Bay, Remuera and Stanley Pt - had lost some of their shine after the majority dipped in value and one of its members, Stanley Pt, fell below the exclusive threshold.

Meanwhile the numbers of those in the $1m-plus suburb club had also dipped slightly in recent months; dropping from 104 to 102 at the end of April.

In the lower-value areas, those still holding out as affordability strongholds at the end of April were Manukau ($539,350), Clendon Park ($556,800), Otara ($572,500) and Red Hill ($596,550).

The northernmost major settlement in the Auckland region, Wellsford, was the only other suburb to hold out with an estimated median of $522,700 during the same period.

While Wellsford was more affordable than most places across the city, it recorded a 9 per cent price growth in the three months ending March 31, up $43,059.

QV national spokeswoman Andrea Rush said market drivers of strong net migration and a shortage of houses in Auckland continued to drive prices up, albeit it not as quickly as in recent years.

"There is still demand for property and record prices being achieved in the market."

She said the latest round of lending restrictions had made it harder for people to secure mortgage financing.

But Rush said the latest figures showed these restrictions had not affected investor activity as intended.

The latest CoreLogic buyer classification data showed purchases by Auckland investors rose to a high of 43 per cent of sales in the first quarter of this year.

In comparison Rush said those moving home fell to 24 per cent from 28 per cent, and first-home buyers dipped slightly from 21 to 20 per cent of all Auckland sales in the same time period.

The estimated values, provided by CoreLogic for the QV quarterly property report, were reached by calculating a weighted average for the suburb according to the estimated market value of each property.

And though affordably priced suburbs are increasingly scarce, more than 50 of the city's almost 200 suburbs showed a drop in value, the figures show.

Overall percentage price growth in the city remained within single digits over the past year, as some of the heat went out of the market.

Property Council chief executive Connal Townsend believed Auckland could eventually become affordable again.

He said if the good work continued in terms of increasing the city's housing supply, along with supporting infrastructure, the market would ease.

"These things always move in big cycles."

However, we were "still behind target in terms of playing catch-up" with what was needed, he warned.

Auckland had an estimated shortage of 35,000 homes - a figure set to increase due to natural population growth on the back of record inward migration.

The Government has promised to increase the city's stock by 26,000 dwellings over the next decade - a move which has been criticised by many for not being enough.

However, Townsend said the problem was ultimately outside Government's control and it was the private sector that would need to step up to develop property.