Housing highs and lows
Miriam Bell looks at the price extremes in New Zealand’s housing market.
It is nigh on impossible to be unaware that New Zealand’s property market is going crazy right now, but where has that left the top – and the bottom – end of the market?
Heading towards the end of last year, house prices were surging and fear of missing out had taken over the market.
There’s no sign of that stopping soon, as the latest data from CoreLogic shows. Property values nationwide were up by 12.8 per cent in January, compared to January last year.
While not all markets, or the suburbs within them, are created equal, the heat in the market means there are few areas where prices have not been pushed up.
So how has that impacted on the top and bottom end of the market?
Homes.co.nz has run the data to reveal which suburbs are now New Zealand’s most-expensive suburbs and, conversely, which are the cheapest.
It should come as no surprise that Auckland, which now has a median value of $1 million, dominates the most-expensive suburbs. Of the 10 mostexpensive suburbs, nine are in Auckland and one is in Wellington, according to Homes.co.nz.
The 10 most-expensive suburbs are Herne Bay, St Mary’s Bay, Shamrock Park, Oriental Bay (Wellington), Westmere, Ponsonby, Stanley Point, Remuera, Epsom and Campbells Bay. Their median price ranges from $1.94m in Campbells Bay up to $3m plus in Herne Bay.
Homes.co.nz chief data scientist Tom Lintern says the $2m club is now eight suburbs strong. Herne Bay is the only suburb with median values exceeding $3m.
‘‘Despite being the most expensive suburbs, the demand for property in these areas continues to be strong. Median values in some areas are up by over 20 per cent a year.’’
The data puts Herne Bay
firmly in the number one spot as the most-expensive suburb in the country, with a median price of $3.03m in January this year. That’s the result of a 20.1 per cent increase in price from January last year and makes it New Zealand’s first $3m plus suburb.
It comes on top of recent CoreLogic data which also crowned Herne Bay as the highest-priced suburb in the country.
With Auckland suburbs accounting for the bulk of the top 10, the sole non-Auckland location stands out. Oriental Bay, which is the fourth-most expensive suburb in New Zealand, has a median price of $2,141,490 and saw a 25.7 per cent increase in prices last year.
Real estate agent Phil Mears, from Tommy’s Real Estate, says it has long been one of Wellington’s top-performing suburbs.
‘‘But it’s a bit more exclusive than the others and it’s very tightly held. So there are not many Oriental Bay properties on the market. Values are high though: there are a lot of
properties in the $8m to $10m bracket,’’ says Mears.
The last house he sold in the suburb was in the $4m bracket. But, in terms of recent sales, more apartments have sold than houses. While apartment prices start from the $800,000 mark, one apartment sold for just over $5m.
Mears says the enduring appeal of the suburb comes down to the fact it has the best of what Wellington has to offer.
‘‘It’s by the beach. There are restaurants and cafes. There are views across the harbour. Depending on where you are, there’s a view back to the city and you get the last of the sun. It’s an easy walk to the city. It’s a lovely place to live.’’
There’s also a scarcity of land for new buildings, with developers always keen when standalone houses come up for sale. Mears says it’s rare that such properties do come on the market, but some of the area’s new developments are from such sales.
‘‘It will continue to be the premium suburb in Wellington and property prices will continue to reflect that. There will always be high demand for good properties in Oriental Bay.’’
At the other end of the spectrum, there’s a bit more geographic diversity when it comes to New Zealand’s 10 cheapest suburbs.
According to Homes.co.nz, the 10 cheapest suburbs are O¯ hura, Ohai, Blackball, Ruato¯ ria, Nightcaps, Taylorville, Murupara, Greymouth,
Ru¯ nanga and Whirinaki.
Of those 10, four are on the West Coast of the South Island and two are in Southland. The others are in Northland, Bay of Plenty, Gisborne and Manawatu¯ /Whanganui regions.
Median property prices across these suburbs range from $43,760 to $127,384. Lintern says that at the cheaper end of the price scale, there are three suburbs or towns with median values less than $100,000.
‘‘With populations declining in these small rural areas, it is clear these are the ‘have-nots’ of the property boom.’’
Tiny O¯ hura, which is near Taumarunui in the Manawatu¯ /
Whanganui region, is the cheapest town in the country. It has a median price of only $43,760, although Lintern says the area has a large number of properties with CVs of approximately $10,000.
The second cheapest area to buy in is Ohai, which is between Invercargill and Te A¯ nau in Southland, and has a median price of $85,196. It’s seen an increase of 53.2 per cent in prices over the past year.
Ohai was a coalmining town and struggled in the decades after the industry downsized. The community is small at around 350 people and there are no shops or schools, but Ray White Invercargill’s Tanya Colyer believes the town has a future.
They are finding that people are selling up elsewhere, cashing up and buying in Ohai for the lifestyle, she says.
‘‘You can get a quarter-acre section with mountain views. It’s great for hunting, fishing, tramping and getting out into nature.
‘‘It’s beautiful and the community is lovely. It’s easy to drive to Invercargill, but these days there are services like Countdown deliveries and the Bullet Courier.’’
The fact that Ohai properties are so cheap is benefiting the town. ‘‘It’s affordable buying so those buying are then spending money doing their properties up. But not only are they tidying up the area, they are moving in and it’s all good for the community.’’
It’s a trend likely to continue, given the steep increase in prices around New Zealand, as well as the growing viability of remote working arrangements and postCovid lifestyle rethinking, Colyer says.
‘‘There’s some interesting purchases too. I’ve just sold a church to a Kiwi couple who have been living in Australia. They have done a bit of renovation in the past so they are planning to do it up and they are keen to do some more and then enjoy the lifestyle in Ohai.’’