Despite an extensive coastline, Auckland’s north shore generates few Waterfront property sales, reflecting the fact that owners are reluctant to relinquish their trophy properties. As a result, when brought to market, rarity value commands premium prices which has seen waterfront sales generate median values of between two and three times that of the wider area.
Waterfront Property Tightly Held
The tightly held nature of waterfront property is well illustrated in the map on page 1, which shows that waterfront property sales makes up a very small proportion of total residential sales across the North Shore. Analysis of Real Estate Institute of New Zealand data shows there to have been 83 waterfront sales in 12 months to June 2016 equating to 1.7% of total sales. Over the subsequent 12 month period just 48 waterfront properties sold making up just 1.2% of sales.
There is little doubt however that low sales volumes are the result of limited listings as opposed to a lack of demand with agency reports advising that a vast majority of waterfront property offerings generate high levels of inquiry and buyer competition.
Premium Values Achieved, Particularly in the East
While median values for waterfront properties, measured over short periods of time, are quite volatile given the relatively small sales numbers, analysis of transactions over the two years to June 2017 paints a far clearer picture.
The median value generated by all waterfront sales across the period was $2,400,000 outpacing the district median of $985,000 by nearly 150 percent.
The difference in values achieved for waterfront property versus the balance of the market is particularly acute within the district’s eastern suburbs. In suburbs to the east of State highway 1 the median over the 24 month period was $2,765,000, all other surrounding sales generated a median of $1,150,000 an average premium therefore of $1,615,000.
Values of both waterfront and inland property within the area’s western suburbs have seen strong growth over recent years as price differentials with other suburbs a similar distance from the CBD has seen the area becoming increasingly popular. Compared with the North Shore’s eastern suburbs however, property remains more affordable. With regard to waterfront property this reflects a number of influences but the lack of swimming beaches is a major factor.
Within the North Shore’s Western Suburbs the median sale price of waterfront and other properties were $1,416,250 and $869,000 respectively, approximately 1.6 times higher.
Of the 15 highest value sales recorded across the North Shore over the two year analysis period 13 of them were for waterfront property, all of which were within the eastern suburbs.
Eastern Suburbs also Dominate Waterfront Sales Activity
The eastern suburbs were responsible for a vast majority of waterfront sales activity, as illustrated in the map below. Of the 131 sales recorded 102 of them were located to the east of State Highway 1.
Lake Pupuke, which encompasses both a lake and a coastline, had the highest number of waterfront sales over the 24 months to June 2017 with 12 sales. Lake Pupuke was followed by Narrow Neck with 11 sales, a suburb which has a coastline on both the east and west side of the peninsula. Third place shared by Hauraki, Bayswater and Torbay with 10 sales each. These suburbs also have long coastlines as they are situated either on a peninsula or cape. However a long coastline does not necessarily mean there are more waterfront properties available for sale, as zoning can be a main restriction for waterfront developments. Long Bay is a good example with no waterfront residential sales despite its very long eastern coastline which is zoned as either Conservation or Informal Recreation zone.
The amount of absolute waterfront land is clearly fixed. In addition however current zoning under the Auckland Plan allows for little intensification on absolute waterfront land within the north shore suburbs. Given, also, that the properties themselves are tightly held, the sector will retain its rarity value which, along with the enduring appeal of uninterrupted water views, will see waterfront properties remain in high demand and continue to command the premium prices.