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Home / New Zealand

Up and up go the house values

By Lynley Ward & Kirsty Wynn
Herald on Sunday·
18 Oct, 2014 04:00 PM4 mins to read

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Jacinta Kerrigan bought her house for $375,000 in 2010, little knowing it was a bargain. Photo / Doug Sherring

Jacinta Kerrigan bought her house for $375,000 in 2010, little knowing it was a bargain. Photo / Doug Sherring

Outlying suburbs are the setting for Auckland's next property boom, as first-home buyers squeezed out of rapidly rising areas look to the outskirts of the City of Sails.

The ripple effect from fast-growing areas such as Mt Wellington, New Lynn, Glen Innes and Birkenhead has put previously dormant neighbouring suburbs on the real estate radar.

And this is reflected in the latest changes in Auckland Council capital valuations where "affordable" fringe suburbs face some of the steepest hikes in the super city.

These include previously unfashionable suburbs of Mangere Bridge and Mangere East, Kelston, Pt England and Beach Haven.

On the North Shore, the most affordable suburbs of Birkdale and Beach Haven are experiencing steady growth with improved access via a new ferry service. Homeowners in each of the suburbs are now looking at an average increase in CV of 44 per cent.

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Bruce Wiggins from QV said first-home buyers and families who had missed out in recent high-performing suburbs had no choice but to buy further out.

Otahuhu was on the watch list because it had good transport links with the city and was "the next one along the motorway" from neighbouring high-performing suburb Mt Wellington.

"Otahuhu has long been seen as the poor cousin because of the high level of industry and social housing but it also has things going for it," Wiggins said.

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Prices in Beach Haven had already started to climb with the average at $621,900.

"Beach Haven has the benefit of sea views, elevation and big sections," Wiggins said. "There is still the issue of access but for commuters there is the ferry service."

The new CVs show homeowners in Mangere face average hikes of 40-53 per cent. Across town, Pt England and nearby Wai-O-Taiki Bay have had some of the single largest increases in the region of up to 62 per cent.

Recent statistics from qv.co.nz show only 26 suburbs in the greater Auckland area have an average price under $500,000, mostly in West and South Auckland. The average Auckland house price is a record $720,000.

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Suburbs on the rise such as Otahuhu, Manurewa, Orewa, Wellsford and Favona showed steady growth in the past three months despite a pre-election dip in listings.

The new boom areas come as Real Estate Institute of New Zealand chief executive Helen O'Sullivan said first-home buyers were finally starting to compromise to get on to the property ladder.

Compromises included price, location and property size.

Further south, Manurewa is also showing growth as young families move to the area.

To the east, Pt England still had affordable homes despite the average price sitting at $590,600.

Wiggins said those priced out of Glen Innes were buying into the area, which had undergone a lot of change with the controversial removal of social housing stock.

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Out west, the growth of New Lynn as a town centre had seen a flow-on effect for neighbouring suburbs.

Glen Eden had seen slow but steady growth with the average house price climbing from $372,900 in 2012 to $493,350 this year. The average CV has also jumped 42 per cent.

The area was difficult to access from the central city but Wiggins said the growth of New Lynn meant more local employment.

"If you are working in New Lynn or Henderson you might choose to live in Glen Eden - why not?" he said.

Mangere is the new unaffordable

Mangere Bridge was once seen as the less-desirable option for those shut out of nearby Onehunga or Epsom. But it is now the new unaffordable.

In the past two years, the Auckland suburb has experienced unprecedented growth of 37 per cent. Now property values in the seaside suburb have an average CV hike of a whopping 53 per cent.

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"We knew the values had risen, but wow," said Jacinta Kerrigan, who bought four years ago for what she now sees as a bargain $375,000. Since buying the four-bedroom, 607sq m property, the mother-of-three has joined the real estate industry as a Barfoot & Thompson agent.

She said the increase in CV reflected prices in the once-shunned suburb.

She had just sold a property with a 2011 CV of $435,000 for $703,000. Nine buyers joined the bidding.

"When I bought here there were plenty of people who didn't see the value in the area I did," Kerrigan said. "Since then the area has just gone crazy and it is harder for first home buyers to get in."

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