Kiwi homeowners are forking out nearly $300,000 more for a typical home than house hunters in the United Kingdom, new figures reveal.
And new data from the OneRoof Property Report shows homes in areas such as South Aucklandcan be well above the UK average and – in some cases – approach London prices.
New Zealand’s median house price had now hit $779,000, soaring 25 per cent in the past year, the property report found.
That’s 57 per cent higher than Brits would typically expect to pay after the average UK price hit £256,000 (NZ$496,222) in March, according to the UK’s Land Registry office.
And Kiwi prices weren’t just steep compared to the UK. The Herald also found they were high compared to the median US of $372,400 (NZ$513,304), but slightly lower than Australia’s $624,997 (NZ$861,475) prices and Canada’s $695,697 (NZ$794,211) average price.
OneRoof editor Owen Vaughan said while comparing median and average prices was not an exact like for like, it showed Kiwi buyers faced being hit from both sides.
“What is a double whammy is that New Zealand houses are not only more expensive than the UK, but wages are also lower than what most British buyers would be on,” he said.
That New Zealand house prices had climbed above the likes of the UK and US, also helped to highlight how much cash Kiwis were pouring into the sector and just how much the market had skyrocketed over the past year.
Median prices in Māngere Bridge in Auckland’s south had now jumped to $1.32m, up $375,000 in 12 months, while Onehunga prices hit $1.3m, up $385,000, and Glen Innes prices were $1.27m, up $315,000.
That meant buying a home in one of these three suburbs would typically cost more than buying in London where the city’s average price was £640,373 (NZ$1.25m).
Overall, there were now 284 Auckland suburbs with median property values of $1m or higher, the OneRoof Property Report found.
That was up from 197 last quarter, and 118 a year ago.
New Zealand also now had 20 suburbs where buyers typically had to spend $2m or more to buy – while another 13 suburbs were likely to join them soon.
One year ago, there were just four suburbs with prices typically above $2m, and 11 three months ago.
Whitford – in Auckland’s east where many homes sit on large, lifestyle blocks, has, meanwhile, joined Herne Bay as the only two suburbs where buyers will typically pay more than $3m to buy.
St Marys Bay, rural Coatesville and Wellington’s Oriental Bay were also on their way to crossing the $3m threshold.
OneRoof’s Vaughan said the latest property report focused on glitzy luxury homes, yet it was the bottom of the market that was most “concerning”.
Auckland was now a city where most homes cost more than $1m, including an “explosion” in the number of homes selling closer to $2m.
The city had 25 per cent fewer properties selling under $1m compared to five years ago, and 37 per cent more selling for prices between $1m and $3m, according to the OneRoof and Valocity data.
That meant million dollar plus homes in formerly working-class suburbs, such asManurewa, Mangere and Otahuhu, were now “common and no longer shocking”, Vaughan said.
“And it is those areas that used to be seen as affordable – and where prices were rapidly approaching the $1m mark – that are cause for concern,” he said.
“The trend is not good news if you are a first home buyer.”
The skyrocketing prices over the past year had heaped pressure on the Government to find ways to give more Kiwis the chance to buy their own home.
It responded by hitting investors with new taxes designed make property investing less profitable and so reduce buyer demand in the housing market.
The Reserve Bank also reintroduced lending restrictions to make it more difficult for investors and other buyers to access home loans.
The Government’s Treasury department this month predicted the measures would prove effective.
It now expected price growth to slow from a peak of 17.3 per cent this year to just 0.9 per cent by mid next year.
“This is a very sharp adjustment in house prices but a very necessary one,” Finance Minister Grant Robertson said.
Economist Tony Alexander agreed the chances were good that price growth would now slow down in the low and middle parts of the housing market.
But Derryn Mayne, owner of the Century 21 New Zealand real estate group, was not so confident.
“House prices will undoubtedly move to more sustainable levels after an unexpected frenzy over the past 12 months,” she said.
“However, less than 1 per cent in the next 12 months is a big call when buyer demand remains so strong, not to mention our borders and economy only opening wider.”
Meanwhile, Manawatu-Whanganui, Gisborne, Hawke’s Bay and Greater Wellington were the country’s hottest property markets over the past year, with house prices rising between 33 per cent and 39 per cent.
House prices in Otago and the West Coast rose the least in the last 12 months – opening them up as possibly the best places for a bargain – with each growing around 15 per cent.
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