Big jump in value of city houses

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Aucklanders will soon receive confirmation of huge increases in the value of their homes, following three years of growth averaging 54 per cent across Auckland City, North Shore and Manukau.

A Weekend Herald survey shows the biggest increases have occurred not in upmarket suburbs but in working-class areas where first-home buyers and immigrants have been snapping up cheap and rundown properties.

Homeowners in Auckland, North Shore and Manukau will be receiving the latest three-yearly valuations of their properties over the next four months. To give them an idea of what to expect, the Weekend Herald surveyed more than 100 suburbs across the three cities, comparing house sales this year with the last official valuations, in 2002.

When the three councils revalue properties, they will use the new figures to set rates. Houses with an above-average rise in valuation will have an above-average increase in rates, and vice versa.

Suburbs such as Glen Innes and Otahuhu in Auckland City, Birkdale and Beach Haven on the North Shore and Manurewa East and Otara in Manukau have seen values rise much more than the average across their cities.

Terry Costello, Barfoot & Thompson Papatoetoe branch manager, said working-class suburbs such as Otahuhu, where house prices have risen by 44 per cent, were coming into their own after years of neglect. Immigrants were also fuelling the boom.

Many ex-rental properties were being snapped up and tidied, contributing to the sharp rise in prices.

Martin Cooper, of Cooper & Co, said the under-$500,000 market was strong on the North Shore, with many properties attracting multiple offers. His firm's last 50 auctions resulted in 92 per cent of the houses being sold within 14 days.

Overall, of the past 60 sales, one in five purchasers was a first-home buyer and one in six was an immigrant, Mr Cooper said.

Beach Haven is a good example of a relatively inexpensive North Shore suburb on the rise. Since May, 31 houses have sold for an average $343,445 - 76 per cent above the 2002 official valuation.

Desirable coastal suburbs on the North Shore such as Campbells Bay and Castor Bay have also experienced strong growth of about 80 per cent. Houses there start at about $450,000 and rise to more than $2 million, according to latest sale figures.

In Manukau City, strong demand for Manurewa East homes has led to them selling on average 59 per cent above their CVs, with average prices of $247,900.

Waitakere City valuations were done in March this year and showed residential land values rose an average 65 per cent.

Westpac senior economist Nick Tuffley said the much-talked-about slowdown in house prices had proven to be mild. "Next year we won't see prices going up at much of a clip."

Bank of New Zealand chief economist Tony Alexander said the increases were similar to other places in the country.

"Prices might pull back but that will happen mainly where they went ballistic, like Nelson and Hawkes Bay.

"Up in Auckland, really the only area likely to see outright price falls would be inner-city apartments."

HOUSE PRICES

Average increase since 2002 valuations

Auckland City 51 per cent
North Shore 63 per cent
Manukau 49 per cent

Selected suburbs

Birkdale 88 per cent
Glen Innes 82 per cent
Birkenhead 63 per cent
Manurewa East 59 per cent
Mt Eden 51 per cent
Clover Park 49 per cent
Greenhithe 44 per cent
Mangere-Favona 33 per cent
Onehunga 31 per cent

Source: Quotable Value