Auckland Areas Where House Prices Are Rising the Fastest
According to a recent property market analysis, New Zealand’s runaway housing market has accelerated at a much swifter rate during the recent mayhem of the COVID-19 lockdown. Some sources believe that this will cool down after some time, but considering the current market situation, affordability will stay inflated and may actually worsen over the forthcoming years.
If you are planning to buy a house in or around Auckland, then dig into this article. We have compiled important information regarding the current trends in Auckland’s real estate market and how you can make an intelligent housing decision.
The Current Real Estate Situation in New Zealand
House prices in different cities in New Zealand have increased twice since the interest rates had fallen from 3.50% to 0.25%. As a result, people who are earning low income and were about to purchase their own house for the first time had to leave those plans behind; house rates are higher beyond their budget and limitations.
The house prices in New Zealand have established a new yearly record, i.e. 8.2%, rising from a median of $561,500 to $607,500. The prices have risen above $600,000 according to the latest data provided by the Real Estate Institute.
According to a recent analysis, Hastings and Whanganui are currently the hottest real estate markets in New Zealand; they have observed the highest annual leap in house rates this year, making their properties the least affordable and raising the pressure exponentially. Talking specifically about Auckland, house prices have inflated from $861,000 to $868,000 this year alone, with an annual increase by a median of $7000.
Auckland Areas Where House Prices are Rising Faster
The average value of the properties in Auckland has climbed to 3.3% over the past three months, which equals $1,391,598 now. Compared to the value rates in August, which were 23.9%, now they have jumped to 24%.
There are 12 different suburbs across Auckland that have faced price inflations over the past year. For instance, areas like Otara, Manurewa East, and Red Hill have median values of more than 20 percent. The rise in median value in Auckland Central comparatively remained as low as 1 percent only.
However, the highest inflation in the median value has been observed in Saint Mary’s Bay i.e. $323,350, and Herne Bay i.e. $3 million. Whereas, the rest of the suburbs have at least suffered an increase of $1 million in the average value. There is no denying that property markets in Auckland have seen a surge in pricing due to a variety of reasons. This has resulted in a fall in the number of purchasers as the prices are becoming quite unaffordable. To highlight the issue, we have compiled a list of various suburbs in Auckland city as well as their average capital growth achieved from January 2000 to June 2021. Following are the top six areas in Auckland where records were set for the fastest rising prices.
- Manawatu/Whanganui: from $337,000 to $407,500; i.e. 20.9%
- Waikato: from $$520,000 to $570,000; i.e. 9.6%
- Bay of Plenty: up 7.8%; from $575,000 to $620,000
- Hawke’s Bay: up 16.3%; from $460,000 to $535,000
- Otago: from $475,000 to $550,000; i.e. 15.8%
- Northland: from $480,000 to $525,000; i.e. 9.4%
Why Housing Supply In Auckland is Constrained?
Auckland’s land is limited as the city is surrounded by seawater. The city cannot expand further and cannot accommodate more houses. Another reason behind the restriction of new construction is city council debts. Due to the self-imposed debt ceiling of 275% of annual rates in Auckland Council, the city cannot fund new infrastructure or the development of any public spaces.
From June up until the end of September, the average value of properties has increased 3.6% in New Zealand. This is a seemingly prompt rise when compared to the average value for August, which was 3.3%.
The national average value of the housing rates is somewhere around $977,456 in New Zealand this year, with a total increase of 26.3% in 2021. For first-time buyers, purchasing and maintaining a property will likely cost a fortune; the market value is probably going to continue rising and there is no going back any time soon; at least until the lockdown restrictions begin to ease up, but that’s not really up to us.