Million-plus boom drives property market | Auckland

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Nearly 300 homes sold for $1 million or more last month, but it is the middle to lower end of the market where activity is the most frenetic according to the Real Estate Institute of New Zealand.

REINZ figures for February show that 295 homes sold for $1 million or more in February, with 92 of those selling for $1.5m or above.

That’s a 47 per cent increase on February last year when 201 homes sold for $1m or more.

That meant there were six suburbs, all of them in Auckland, where the median selling price was above $1m in February: Herne Bay, $1.685m; Remuera, $1.244m; Freemans Bay, $1.1m; Ponsonby, $1.08m; Castor Bay, $1.075m; and Mellons Bay $1.058m.

The median price is the price that would be the middle price if all prices were listed from highest to lowest. The REINZ’s median prices are for sales contracts that become unconditional each month, providing a good indication of the latest market activity.

REINZ chief executive Helen O’Sullivan said a $1m median price was a significant threshold for any suburb because it would mean that half the sales made during the month would have been at prices above the median

However, though the top of the market remained buoyant, it was the middle-priced suburbs that were facing the greatest upwards price pressure, particularly in Auckland, O’Sullivan said.

This was a result of potential buyers being squeezed out of the top suburbs and forced to look for homes in cheaper surrounding suburbs, she said.

If the median prices in the top suburbs had risen from say $800,000 to $1m over a couple of years, there would be a large proportion of buyers who would still like to live there but could no longer afford to.

They would be forced to lower their sights and look to suburbs where prices still were affordable for them.

But the influx of new buyers into these lower-priced suburbs then started pushing up prices there as well, causing a chain reaction, as many more potential buyers are forced to look even further afield at suburbs on the next rung down the property ladder.

In Auckland, where price pressures are greatest because of its growing population, some of the biggest price gains are occurring in suburbs that were once considered to be at the more affordable end of the scale.

In Westmere, which borders the country’s most expensive suburb of Herne Bay, the median price was $992,500 in February, up from $812,500 in February last year.

The same effect can be seen a little further out in Sandringham, where the median price has climbed from $589,000 in February last year to $820,500 last month.

Even further out in Waterview, which was once definitely considered a working class suburb, the median price has shot up from $463,500 in February last year to $588,000 last month.

Outside Auckland, it is a lot easier to buy into the most expensive suburbs in most cities.

The REINZ and Fairfax Media (publisher of the Sunday Star-Times) have joined forces to provide the “REINZ/Fairfax Media Housing Market Report”.

This lists the median selling prices for most suburbs and towns throughout New Zealand from Kaitaia to Te Anau. It shows that the Wellington suburb with highest median price in February was Seatoun at $916,000. In Christchurch it was Northwood at $784,250,and in Dunedin it was Waverley at $470,250.

– © Fairfax NZ News

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