Transactional activity looks to have found a base on the North Shore, reflecting ongoing buyer interest at current price levels. Higher density housing consents now represent more than 60% of all residential building consents on the North Shore and are likely to continue to grow on the back of strong demand.
Values on the North Shore entered a period of consolidation over 2016 and 2017, after an extended period of rapid increase. Over the March 2018 quarter, values decreased by 6% on the prior quarter but still remain at the historically elevated levels of $1,012,500. Encouragingly median values look to have bounced back somewhat over the June 2018 quarter recording a provisional median value of $1,030,000 based on statistics recorded over April and May.
North Shore transaction counts softened over the March 2018 quarter, following the wider Auckland market trend, both experiencing a 4% decrease in sales activity since the prior December 2017 quarter. Lending restrictions imposed by the Reserve Bank as well as commercial banks limiting access to credit has led to a slowing in sales activity despite continued demand from the market. A strong economy, solid population growth and a significant regional housing shortage are key factors underpinning the supply and demand imbalance within the North Shore.
Increasing property values over the last three years are well illustrated by the proportion of sales within the various value bands. Over the year to March 2018, the proportion of sales to occur over $1 million in the North Shore made up 53% of all sales transacted while sales for over $1.5 million constituted a 20% share.
The Unitary Plan has encouraged an ongoing trend evident on the North Shore for higher density development activity. Over the three months to April 2018 the proportion of consents issued for multi-unit housing was 61% of total consents, compared to 48% for the three months to April 2015.
The mix of residential transactions over the year to March 2018 shows the North Shore’s market diversity. The Milford/Takapuna area holds the largest mix of transaction types with 44% being for multi-unit housing, followed by Albany and Birkenhead area, each with 24% of all sales being attributed to high density housing.
Value growth on the North Shore for Apartment and Townhouse dwellings reflect ongoing demand. Over the year to March 2018 Apartment values reached $661,000 and Townhouse values reached $849,000, up 20% and 13% respectively from two years prior.
According to the MBIE’s tenancy bond database, the mean rent for the North Shore shows a steady increase in value reaching an average of $585/week over the year to May 2018, up 4% when compared to the same period a year earlier, illustrating the rise in demand for rental properties. The North Shore’s mean rent over the year to May 2018 was $43/week higher than the wider Auckland Region’s mean rent.
North Shore Residential Hot Spot Map (6 Months to March 2018)