Working-class suburbs boom

The cities of Auckland, North Shore and Manukau have witnessed house-price increases of up to 80 per cent in predominantly working-class areas, according to a Weekend Herald survey of a wide range of suburbs.

The survey shows the housing boom has been slower in the upmarket suburbs than poorer areas where first-home buyers and immigrants have been pushing prices a lot harder to move into the expensive Auckland property market.

Suburbs such as Glen Innes and Mt Wellington in Auckland City, Birkdale and Beach Haven on the North Shore and Manurewa East and Otara in Manukau have enjoyed the biggest percentage increases when house sales this year are compared with the last official valuations in 2002.

Quotable Value is reviewing capital valuations in 100 suburbs over the three Auckland cities.

However, in some of these, too few recent sales have been recorded to provide accurate averages of price rises for publication.

The Weekend Herald has, therefore, listed only suburbs where 20 or more sales have been recorded since May. The Quotable Value figures show three years of growth averaging 54 per cent across Auckland City, North Shore and Manukau. Homeowners in these cities will receive the latest three-yearly valuations of their properties over the next four months.

The councils will use the new values to set rates. Houses with an above-average rise in valuation will have an above-average increase in rates, and vice versa. Waitakere City valuations were done last year and showed residential land values rose an average 65 per cent.

The Quotable Value figures are slightly ahead of the latest figures out from the Real Estate Institute this week, which show that the average cost of a house in Auckland has risen from $264,000 in August 2002 to $375,000 last month - an increase of 42 per cent.

The institute's figures show the North Shore has the highest average house price of $438,000, followed by Auckland City ($410,000), Manukau ($349,500) and Waitakere ($330,000).

BNZ chief economist Tony Alexander said this week that the latest data showed the housing market was holding up even though the long-term outlook was less rosy.

Demand for housing would be dampened soon by predicted negative net migration towards the end of this year, interest rate rises to counter inflation, higher oil prices which would quell domestic spending, and a ballooning in the number of dwellings under construction, Mr Alexander forecast.

The pattern of price growth is well illustrated in Auckland City where the traditionally expensive suburbs of Epsom, Orakei, Parnell, Remuera and Herne Bay have experienced gains of 40 per cent or less. It has been the working class suburbs of Glen Innes, Panmure, Mt Wellington, Onehunga and Waterview that have soared 60 per cent to 80 per cent.

On an average street like Malone Rd, off busy Mt Wellington Highway, a 1960s brick and tile home sold for $260,00 in 1998, $312,000 in 2002 and $415,000 in July this year. The latest price was 68 per cent above the 2002 valuation of $247,000.

Mid-year sales figures from Quotable Value show people could still get a house in Otara-Manukau Central area for a bit under $200,000. But those days are nearly over. Parts of Manurewa, east of the Southern Motorway, are also enjoying a high demand, helped by developers opening up farmland for housing.

David Clifton of Eastzone Realty said that the phenomenal growth of the Botany Downs-Flat Bush area meant the market would be strong for some time to come.

People in those areas tended to change houses more quickly than those in Pakuranga and Howick, he said.

Mr Clifton said many buyers in the established areas were local people, whereas new settlers were going to newer areas such as Botany Downs.

The area was still developing and drawcards included the Botany Town Centre, the new Botany College, entertainment, and commercial areas such as car sales yards.

Bayley's Howick branch manager, Karen Drinkwater, said the most demand was for properties between $300,000 and $500,000.

Prices are up in the North Shore's harbour suburbs due to a shortage of houses for sale, said Garry Denley, of Lochores Real Estate, Glenfield.

Devonport's median sale price is holding at the $600,000 mark, said Chris Rogers of Chris Rogers Real Estate.