Waiheke’s residential values generally follow the broader Auckland market, each witnessing rapid price growth between 2012 and 2017. Subsequently both markets have moved into a period of consolidation, although Waiheke’s median price was significantly higher than that of the wider Auckland market.
The current consolidation, following an extended period of strong value growth, is a necessary and healthy phase of the property cycle and will help form a base from which the next growth cycle will commence.
The Waiheke residential market peaked in the December quarter of 2016, reaching a record median value of $1,012,500. Since this point, median values have fluctuated between the $850,000 to $1,000,000 dollar mark. The volatility seen is caused, largely, by the relatively small sales volumes generated. Over the September 2018 quarter a median value of $871,250 was recorded, a decrease of 11% when compared to the prior June 2018 quarter. Sales activity decreased over the September quarter with just 34 sales transacted. Traditionally sales activity on the island increases during the Spring and Summer periods with agency feedback suggesting that this trend will continue this year.
Tightening of credit availability is having the largest influence on transactional activity, however a number of market fundamentals continue to underpin values throughout this consolidation period. Net migration has come off its peak although remains almost three times above its long term average. Interest rates remain at historically low levels with every indication they will remain lower for longer and capacity constraints in the construction sector continue to limit the supply of new homes. These factors ensure that residential values within the wider Auckland region and Waiheke residential market, remain well under pinned.
Oneroa gained the title as the most expensive and active suburb in the Waiheke market over the year to September 2018, recording a median value of $1,245,000 and a total of 60 transactions. The second most active market was Onetangi with buyer interest in the area strong with desirable white sand beaches and refurbished hospitality options generating appeal.
A breakdown of residential transactions by price bracket in the Waiheke Residential market over the past 3 years shows the movement in value bands. The proportion of sales to occur for over $1 million dollars has increased from a total of 19% of total transactions in 2016 to 29% in 2017 and 2018, consolidating at elevated levels.
Transactions in the Waiheke residential market are unsurprisingly dominated by standalone residential houses with purchasers seeking the unique relaxed, easy living lifestyle advantages Waiheke provides. The appeal has been bolstered over recent years through an increase in retail and leisure amenity. Unlike the wider Auckland Region, a trend towards higher density housing is not evident and is not likely for Waiheke in the future due to the level of infrastructure and reticulation services this type of housing requires.