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 to record levels across the North Shore over 2014.
The North Shore’s residential median price reached $800,000 for the first time ever in the December 2014 quarter according to the Real Estate Institute of New Zealand (REINZ). This equates to a rise of $80,000 or 11% from 12 months earlier and $175,000 or 28% increase from December 2012 quarter.While values have risen, quarterly sales volumes have continued to trend downward since 2012 according to REINZ data. This is exacerbated by the shortage of dwellings. Homes are in hot demand so days on the market are especially low, together with much smaller numbers of stock coming onto the market for sale – applying upward pressure on the North Shore median sale price. The number of dwellings sold in the North Shore in the last quarter was 1,406, which is stable in comparison to the December 2013 quarter but the annual figure is down 696 sales or 14% 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 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.
North Shore Median Price Hot Spots
Spot Light on Long Bay
Long Bay, located at the northern end of the East Coast Bays on Auckland’s North Shore has seen its population increased sharply over recent years. Between the census of 2006 and 2013 its population increased by 14.8%, with further significant growth anticipated in the area following completion of the new Todd Property Long Bay subdivision. The Long Bay master plan comprises 162 hectares overlooking the Regional Park and beach with an environmentally responsive approach, with room for 2500 houses, to be released in stages. Amenities are excellent with two decile ten schools on its doorstep and a contemporary village centre comprising of medium sized supermarket and a variety of small shops and cafés planned for completion in 2017. Complementing the adjacent Regional Park are the 28 hectares of community parks, wetlands and walking tracks offering magical views of the Hauraki Gulf, also every home will be within 400 metres of a green space. A separate developer has plans for a four storey apartment block containing 38 apartments which are priced from $770,000 to $1,800,000 ranging in size from 110-160m².
Currently around one third of sections have been sold encompassing approximately 500 house sites, and 150 residences have commenced and/or completed construction thus far. The current Long Bay median sale price at $1,210,000 sits approximately $400,000 above the rest of the North Shore as a whole reflecting the demand for modern, well situated properties.
Spot Light on Coatesville / RiverheadCoatesville and surrounds is a model demonstration of the suburb to lifestyle property movement in the North Shore. The area offers close proximity to Auckland’s North Shore suburbs and motorway but is far enough away from the hustle and bustle to have a rural feel and community. The community has a decile 10 primary school with top rated secondary schools in nearby suburbs. Latest census figures show that the greater Coatesville area population increased 7.4% compared with 5.3% growth in the Devonport/Takapuna area. Residents’ income brackets in the Coatesville area are generally higher than the rest of Auckland with 41.4% of people earning greater than $50,000 compared with 29.2% of Auckland residents earning in that bracket. Reports of a trend of urban dwellers from the North Shore moving from the suburbs to lifestyle in the Coatesville area are backed by REINZ statistics which show there to have been upward pressure on median price and sales activity levels over recent years. The appeal and demand of rural living has moved the median price in Coatesville to $1,515,000 or 11% up on the 2013 median of $1,362,500 according to REINZ. Median prices in Coatesville have been steadily trending upward since the end of the GFC, along with sales volumes which were affected to a large degree. The number of sales being 65 in 2014 more than doubles the sales volumes seen just two years ago in 2012. Auckland building consents have hit a nine year high as the development sector has moved to alleviate the housing shortage in the region. Census data also illustrates the growing population of 8.1%
The Next Hot Spot
Interestingly, in contrast to what may have been expected, value growth within some of the Shore’s more affluent suburbs has kept pace with those which offered more affordable housing in 2010.
As illustrated in the table above, Campbells Bay which boasted the areas highest median in 2010 has seen its median grow by 49.4% matching that of Sunnynook which had the lowest of the areas medians in 2010.
The figures would indicate therefore that while values have lifted across the area, there remains a desire to live in the more expensive coastal suburbs which has resulted in a sustained upward pressure on prices.
Levels of sales activity has also risen sharply since 2010 but it is noticeable that growth suburbs such as Albany, which due to the availability of land, has witnessed significant new development, has outpaced growth in many of the more established suburbs where development land is scarce.