The Eastern suburbs have, over recent years, become an aspirational location for home buyers with the area’s popularity resulting in strong value increases. Over the last twelve months however, the combination of a strongly performing economy, which has lead to job creation, low interest rates, a booming population and a housing shortage have combined to drive property values in the area to record levels.
The Eastern Suburbs region remains one of the most desirable areas of Auckland for people to invest or live in. As a result, strong competition among purchasers for property brought to market is the norm. The high levels of purchaser interest has driven continued value increases, with the median sale price in the Eastern Suburbs for the twelve months to January 2015 reaching $1,150,000, an increase of $175,000 or 17.9% compared with the twelve months prior according to the Real Estate Institute of New Zealand (REINZ).
Having reached a post Global Financial Crisis (GFC) low of 1,119 annual sales in 2008, activity levels have recovered strongly. Albeit the 2014 total of 1,780 fell short of the 1,936 transactions recorded in 2013. Agency reports confirm continued strong interest in properties in the early to mid $1,000,000 price range. Increased volumes of potential purchasers are showing interest in these dwellings due to the noticeable decrease in homes for sale in these price brackets.Homes in the area remain in hot demand so the average time taken to sell a property is currently especially low at 42 days, together with much smaller numbers of stock coming onto the market for sale. The number of dwellings sold in the region in the last three months was 418, which is marginally less in comparison to the same three months to January 2014, as mentioned above, the annual figure is down 207 sales or 10% on the year prior. The drop in activity has been caused by the general shortage of housing apparent across the Auckland region, a situation exacerbated by the recent migration boom and a decline in new listings being brought to the market. Consumers seem cautious of selling their dwelling before having a home to move on to, affecting the lack of stock coming to the market along with the pressure caused by the housing shortage and migration boom.
Eastern Suburbs Median Price Hot Spots
Spotlight on RemueraHistorically one of New Zealand’s most affluent suburbs, Remuera continues to be home to the some of the population’s most affluent people. The median income per person in Remuera of $45,200 is 65% greater than the wider Auckland median income of $29,600 according to Statistics New Zealand.
With some of the top private and public schools in the country, well provided amenities in the village, and proximity to the CBD and Newmarket, the desire to live within into the suburb has not waned. Consequentially this demand teamed with Auckland’s housing shortage continues to put upward pressure on prices and has pushed the median sale price for Remuera to an unprecedented level of $1,310,000 for the twelve months to January 2015. This is a 10.5% or $125,000 increase on the same period a year prior. The number of sales transactions are down 16% to 552 concluded sales in the twelve months to January 2015, selling after 40 days on average, about a week less than the long term average of 46 days.
Rising values have further stimulated development interest in the suburb, albeit that land is in short supply. Two local schemes promoted following recent land sales are at very different stages. On Rangitoto Avenue at the old Rawhiti Bowling Club development has still not started as the process for consent to build a retirement village is ongoing, currently there is consent for nine lots only. Construction at 464 Remuera Road however, has started, with the floors and main structure to be finished in the next month and the entire complex having an anticipated completion date of October 2015. Of the nine luxury apartments, four have been sold and developers are confident, with construction now underway, that the remaining five, priced between $1,800,000 and $5,500,000 will get scooped up with continued interest from the public.
Spotlight on St HeliersThe seaside suburb of St Heliers has experienced a marked increase in values in recent years. Its seaside charm, proximity to the heart of Auckland city, along with a number of cafés, restaurants, boutique shopping and stunning views of Rangitoto all combining to entice people to live in the area. The rising population and demand for housing has put pressure on housing stock and, in turn, both rental and capital values, with 18.3% median price growth over the twelve months to January 2015.
After values dipped in 2008 as a result of the GFC, the median price plateaued for a few years until a sharp increase in 2013 and again in 2014, concluding the twelve months to January 2015 at a median value of $1,150,000. This equates to a $177,500 increase over the twelve months. Days on the market are stable, taking 44 days to sell, and volume of sales had a slight drop over the period from 272 transactions in January 2014 down to 241 in the year to January 2015.