New Zealand's most expensive suburb and one of its cheapest were at the epicentre of the country's biggest property boom, according to new research by OneRoof and its data partner Valocity.
Median house prices in Herne Bay, in central Auckland, jumped a massive 77.78 per cent – from $1.125m to $2m - during the peak boom year of 2014, while prices in the student-friendly suburb of Grafton rose 89.06 per cent over the same period, from $320,000 to $605,000.
The two suburbs experienced the largest annual growth after the house-price slump triggered by the Global Financial Crisis in 2008.
Research by OneRoof and Valocity found that prices in more than 51 suburbs in Greater Auckland grew more than 20 per cent during the 12 months of 2014, with the average gain for the city as whole coming in at just under $100,000.
The figures show how the boom then moved steadily outwards and spread to Hamilton and Tauranga in the second half of 2015.
OneRoof and Valocity measured six-monthly changes in house values in Auckland, Hamilton, Tauranga, Wellington, Christchurch and Dunedin between 2005 and 2019, to get a more accurate picture of how the boom spread and to pinpoint where the weaknesses are in the market.
The time-series of property prices shows the price ripple in action, highlighting the boom's spread to the regions outside Auckland and the softening of prices as the market slowed.
"Some parts of Auckland were in double-digit growth through early and mid-2015, OneRoof editor Owen Vaughan said.
"The explosion in prices in Herne Bay and Grafton heralded a lot of what was to come in the boom, with properties in wealthier suburbs becoming seriously expensive in a short time frame, and previously affordable inner-city suburbs increasing in value and demand because of their proximity to the CBD."
The Auckland region with the biggest lift in prices in the first year of the boom was the North Shore, where median prices jumped 25.57 per cent ($211,969) to just over $1m. However, price growth for the region dropped fairly rapidly in the following years of the boom, down to 10 per cent in 2015-16 and then 2 per cent in 2016-17.
"The North Shore has been at the centre of the current slowdown in Auckland's housing market, with high prices, the foreign-buyer ban and a lack of pressure on vendors putting brakes on activity," Vaughn said.
"The region's housing market is a sign of what is happening and is going to happen to the rest of Auckland and other high-growth areas around New Zealand."
James Wilson, director of valuation innovation at Valocity, agreed: "This part of Auckland has traditionally attracted the international market and higher-net-worth individuals, so boomed first and then went off the boil sooner."
He expected the negative growth in the North Shore (-4 per cent in early 2018 then -5 per cent in the first half of 2019) to fan out to suburbs in Auckland Central, Franklin, Rodney, Manukau and Papakura.
He pointed to areas like Waitākere and Papakura, which kept showing growth until mid-2017, and where price drops are still around 2 to 3 per cent compared to the 5 to 8 per cent drops in Auckland Central and the North Shore.
"Now the money is moving to the local authorities on the fringes of Auckland: Kaipara grew 34 per cent in first half of 2017 and is still showing 2 per cent growth; Hauraki grew 22 per cent in six months, only slowing now to 6 per cent and Waikato growth peaked well into 2017, now at 3 per cent. That's places like Te Kauwhata or Pokeno."
Wilson said investors typically started in the centre, in areas close to the economic heart of the city such as Auckland Central and the North Shore, and then, as their equity improved, pulled out and took their funds to the fringe.
"Then they flow out to the buffering edges of the city, where prices are comparatively more affordable and equity gained in central locations goes a lot further."
Vaughan said OneRoof and Valocity found similar patterns around Hamilton, where the prices shot up 13 per cent in the second half of 2015 and then grew 10 per cent every six months until the end of 2016.
The ripple then spread to neighbouring rural Waikato and Waipa six to 12 months later, when prices grew between 8 and 13 per cent every six months until the end of 2017.
"In the same way, Tauranga's boom started to taper off towards the end of 2016, and spill into neighbouring Bay of Plenty towns, pushing prices up between 7 and 17 per cent right through until 2017."
In Wellington, the flow of price growth has gone from the city to Lower Hutt and, more recently Porirua, where prices grew between 12 and 16 per cent through late 2018, and are only now slowing down, as buyers turn their attention to the Kapiti Coast or Wairarapa.