A crammed auction room in a small Auckland city fringe agency last month revealed an interesting story on the patchy residential property market.
The same week in which investors around the world were sweating at Italy's economic predicament within the pall hanging over Europe, nine parties registered to bid for a house in a pleasant but undistinguished street in Mt Albert.
If they had concerns European turmoil could develop into recession and, through a long and winding path, undermine house prices in such a distant corner of the world, they kept them well hidden. The bidding for 6 Chatham Ave opened at $800,000 and ended at $1.025 million - a staggering result in a real estate cycle which remains tentative as the local economy shuffles along, searching for good news.
Mt Albert is one of Auckland's oldest suburbs, with streets of 1920 bungalows on big sections, and has an established $1 million-plus belt on the northern slopes of the mountain running down through what agents call the "Golden Triangle" towards the city. But Chatham Ave is well outside that patch - over the railway line to the south-west end of Chamberlain Park golf course.
It's hardly the wrong side of the tracks, but a little removed from the sniffy appeal of homes in the lee of the mountain. For their money - a giddy $315,000 above the latest council rating capital valuation - the young couple bought a beautifully renovated and extended four bedroom, two bathroom 1926 bungalow on a 622sq m section.
Was it really worth that much? To the young couple, obviously, and to the two other bidders who stayed in there right to the end. They know a home of the same quality in a good street in parts of neighbouring Pt Chevalier or Grey Lynn would cost more, so they've set a new benchmark in a relatively undiscovered part of Mt Albert. It's the valuation "ripple effect" in action. At the same time, they've highlighted the up-and-down nature of the city at the moment.
In the same week Chatham Ave was breaking local records in the Anne Duncan Real Estate auction rooms - and similarly well-presented homes in prime areas were pulling good prices - other properties across Auckland were drawing little or no interest. For some properties, it's been a sellers' market; for others, fussy buyers have been very much in command.
The statistics show the overall trend, within Auckland and beyond, is inching upwards as buyers start to come back, though most of them are cautious and ready to move to the next property if the price isn't right. It's the return of sellers in full force which will test the market, though.
They are starting to come back, boosting stock from the troughs of the last three years, and overall prices may flatten out as new listings grow through the summer months. While sale volumes are recovering, they remain well down on the market peaks.
In November 2003 there were 3844 sales across Auckland (May 2003 produced a record 4078) but in October this year there were just 1832 (November figures weren't available as this edition was published.)
That total, however, was a decent jump on the same month last year, when just 1360 sales were recorded. So there seems to be a bit more life in the market now than a year ago, but outside the pockets of real action it's still fairly subdued.
As Chatham Ave shows, attractive homes close to the CBD - and in belts in wider parts of the city - are commanding real premiums as the market waits for more fresh listings to come through. Inner-city character homes are in special demand from 30 and 40-something couples moving on from first homes, while more modern family homes with four bedrooms and two bathrooms are also doing well.
But it is all rather patchy, with plenty of properties going nowhere. As QV's Glenda Whitehead puts it: "Statistics aside, our valuers on the ground report that little has changed over the past couple of months.
With no real boost to spring listing numbers, trends look similar to those experienced in the winter months. "While we continue to see sale prices move positively in many suburbs, activity is patchy. "Where there is strong demand it is often not matched by listing levels, resulting in some fierce competition for desirable properties.
Typically, these are suburbs close to the CBD. Activity in many of the outer suburbs remains flat." Whitehead says valuers have also noticed more activity within the Manukau area, particularly the eastern suburbs and Dannemora, where prices are hitting 2007 peaks. She adds: "October/November can be a turning point in the market setting a trend for the months that follow. "If there is positivity in the wider market, this period can be hectic. Alternatively, when confidence is more fragile this can result in procrastination and many simply defer their financial decisions to the year following. This year, the general election could provide an additional excuse not to act."
But the biggest potential influence on prices in 2012 is the shadow cast by the European economic turmoil and the fear of global recession. The Reserve Bank has warned of the risks of a sharp fall in house prices if the Euro zone stumbles further and noted in its last report: "Debt-to-income ratios remain at historically high levels and house prices, although they have declined relative to incomes, still seem somewhat overvalued."
It all adds up, at the very least, to a general lid on prices, and a rise in listings over the summer should take some of the sting out of those pockets of Auckland doing particularly well.
While the data reveals fairly consistent rises across all parts of the new city in the quarter to September 30, some of the more modest suburbs have shown greatest gains and are now above, or close to, the values at the height of the boom in 2007.
Out in the regional areas, the latest quarter shows fewer declines but many towns are still doing it hard and well off their highs of four years ago, some by more than 20 per cent.
For a snapshot of the cities, QV's national house price index (based on sale prices against rating capital valuations) gives the clearest picture of the price change from the peak of 2007 to the end of October (with the movement over the last year in brackets):
• The new merged Auckland city: down 0.1 per cent
since peak (up 2.7 per cent in the last year)
• The old Auckland City Council suburbs: up 1.6 per
cent (up 3.8 per cent)
• North Shore: down 1.4 per cent (up 2 per cent)
• Waitakere: down 3 per cent (up 1.8 per cent)
• Manukau: down 1.8 per cent (up 1.6 per cent)
• Whangarei: down 16.9 per cent (down 2 per cent)
• Hamilton: down 11.4 per cent (down 0.7 per cent)
• Tauranga: down 11.8 per cent (down 0.5 per cent)
• Rotorua: down 11.7 per cent (down 1 per cent)
• Taupo: down 14.1 per cent (down 5.4 per cent)
• Wellington: down 6.4 per cent (flat)
The Auckland price performance was, in fact, slightly better than the data shows after a one-off adjustment in the index to allow for the latest rating valuations. That produced a small drop for Auckland in the month to October 31, even though QV says the underlying data showed a continued improvement in prices.
Auckland continues to be the powerhouse of the national residential real estate market, matching the city's economic muscle. Continued population growth and the buzz and opportunity mean the gap between the Big Smoke and elsewhere will get only wider.