Residential values in the Eastern suburbs have held at elevated levels over the 2018 year. In combination with the aspirational nature of Eastern Suburbs property, a number of supporting market fundamentals continue to underpin values.
The Auckland housing market has experienced exponential growth since 2008, although over more recent years has entered into a period of consolidation with prices flattening. The Eastern Suburbs has followed this trend and, in fact, has generated even stronger growth than the broader Auckland market. Eastern suburbs median values are 89% higher than the wider Auckland region over the provisional half year to December 2018. When comparing the half year to June 2000 figure with the half year to June 2018 figure, median values in the Eastern suburbs have increased by a total of 299% versus the Auckland wide increase of 257%.
Over the September 2018 quarter the Eastern suburbs recorded a median value of $1,560,000, up 2% on the same period a year prior. The number of properties transacted over the September 2018 quarter decreased by 8% when compared with the prior quarter, with just 260 sales transacted.
Despite having the highest transaction count in the Eastern suburbs, Remuera continues to demand it’s title as the most sought after suburb, with a median value of $1,847,500 over the year to October 2018. St Heliers holds the second highest median value of $1,675,000 followed by Orakei with a median value of $1,655,000.
A number of underpinning fundamentals in the Auckland market including immigration levels remaining almost two and a half times above the long term average and tight local supply remain important factors in play. The RBNZ has announced an easing in their loan-to-value ratio’s (LVR) for new bank mortgage loans, taking effect from the 1st January 2019. Up to 20% (up from 15%) of bank lending to owner occupiers can now be for loans with a deposit of less than 20% and up to 5% of loans to investors can have deposits of less than 30%, previously 35%. This is likely to act as a positive stimulus for increased sales activity.
Building consents in the Orakei ward have ramped up significantly over the year to September 2018, up 70% when compared with the same period a year prior. This is largely due to the increase in retirement consents when compared with the year to September 2017, with an additional 71 consents issued for this type of housing over the year to September 2018. Across all types of housing however, a marked increase in the number of consents issued was evident showing the construction sectors response to the continued demand and supply imbalance.
Spotlight on Mission Bay
Residential values in Mission Bay have clearly consolidated at elevated levels over 2017 & 2018. Over the 12 month period to October 2018, an average median value of $1,642,000 was recorded, just off the late 2016 year peak. Current values are expected to remain well underpinned due to Mission Bay’s attractive fundamentals and relatively limited supply.
Spotlight on Parnell
Parnell’s overall residential values have come off their 2017 highs, down 7% over the 12 months to October 2018. It is important to note that more than half of all transactions within Parnell are for higher density housing such as apartments and townhouses, having an impact on overall residential median values.
Over the year to October 2018, stand-alone residential houses made up 45% of all transactions, and recorded a median sales value of $2,240,000, up 6% on the prior year. Over the same period apartment sales accounted for 34% of all transactions, with a median value of $800,000, up 3% on the prior year. While apartment and residential house values have held strong within Parnell, median values for other higher density housing including townhouse and unit accommodation have decreased by 36% and 12% respectively, bringing Parnell’s overall median residential value down over the year to October 2018.