Quarter acre dream 'out of reach for most Aucklanders'

Aucklanders looking to get on the property ladder are now faced with paying well over half a million dollars for the cheapest property type on the market: an apartment or a home unit. Average asking prices are now well over $500,000 and compact living options are the most affordable, with a huge increase in demand for these housing options in the last month. Head of Trade Me Property Nigel Jeffries says the latest Property Price Index showed that while the average asking price in Auckland has risen by 20 per cent in the last year, small houses (1-2 bedrooms) had increased 24 per cent and apartments were up a "staggering" 49 per cent in a year. "It’s a massive amount of money for an apartment but that’s the grim reality of the demand from buyers in the Auckland market now. The quarter acre dream is well out of reach for the vast majority of first-time home buyers in the city," Mr Jeffries said. "The average asking price for apartments in Auckland is now $566,350, up more than $185,000 in the past 12 months. That Auckland increase alone is more than the average asking price of a two-bedroom house in Manawatu, Wanganui, Southland or the West Coast." He said the average asking price for an Auckland apartment ($566,350) was now higher than for a medium-sized house anywhere else in the country ($422,200). Across all property types, the average asking price in Auckland increased by 1.9 per cent in August, reversing the 2.2 per cent fall seen in July. The average asking price in Auckland is $770,900, just short of the peak of $773,350 reported in June 2015. "The average asking price for a property in Auckland has increased by $10,000 a month over the last year," Mr Jeffries said. "And in the last five years it’s risen by 64 per cent, all the way up from $473,850 back in August 2010." Meanwhile outside the Super City In contrast to Auckland, the rest of NZ showed a decline in average asking price in the 3 months to August of 1.9 per cent, now at $406,750. "Over the last year the average asking price of properties outside Auckland have risen just over 3 per cent or $13,400, a drop in the bucket compared to our largest city," Mr Jeffries said. "Since August 2010 we’ve seen the average asking price of a typical home outside Auckland rise by around 20 per cent or $66,000 - that’s solid growth but overshadowed by the skyrocketing increases in Auckland." Regions turn about-face Most regions reported modest rises of less than 10 per cent, with the exception of Hawke’s Bay (+18.9%) and the West Coast (+14.2%). As in July, four regions showed a year-on-year decline in average asking price in August. The largest fall was seen in Gisborne (-17.7%), while Otago (-3%), Taranaki (-2.3%) and Manawatu/Wanganui (-1%) also experienced decreases. With the exception of July, Otago has experienced decreasing average asking prices for the last six months. Taranaki now appears to have run out of steam after some extremely strong growth in the last year including monthly increases as high as 24 per cent. Wellington continues its modest average asking price growth in August, up an anaemic 0.5 per cent year-on-year. Growth in average asking prices has now been sluggish in the capital for six months. By house size Small houses (1-2 bedrooms) led the charge this month with a 15.6 per cent increase in average asking price, driven by the strength of the Auckland market. Average asking prices for large houses (5+ bedrooms) also experienced rises in both Christchurch and Auckland. In Christchurch they were up 19.7 per cent in the past year, and headed past $800,000 for the first time, an increase of $131,700 in the last year. Auckland’s large houses turned in a 16.6 per cent rise, up $165,150 in the past 12 months and surpassing $1.15m. Wellington experienced average asking price decreases for small and large houses, and medium houses (3-4 bedrooms) only showed a modest increase of 1.6 per cent. Table 1: Average asking price by property size & region, August 2015 v August 2014 All Properties / Large houses 5+ bedroom / Medium houses 3-4 bedroom / Small houses 1-2 bedroom New Zealand / $557,850 + 14.6% / $952,900 + 13.3% / $557,900 + 12.2% / $372,200 + 15.6% New Zealand excluding Auckland / $406,750 + 3.4% / $616,300 - 1.6% / $422,200 + 3.7% / $277,700 + 4.5% Auckland / $770,900 + 20.2% / $1,157,450 + 16.6% / $784,050 + 16.7% / $616,000 + 24.6% Wellington / $423,550 + 0.5% / $649,200 - 6.5% / $445,200 + 1.6% / $306,500 - 1.8% Christchurch / $456,650 + 8.2% / $801,550 + 19.7% / $487,500 + 6.7% / $325,500 + 12.3% Compact living grows increasingly popular Compact housing options like apartments and units are seeing significant gains around the country, fueled by the Auckland market. Mr Jeffries said the average asking price for apartments in Auckland has hit a massive $566,350 this month a jump of more than $65,000 since July. "One factor contributing to this leap is a range of new apartment developments hitting the market recently, many of which are priced significantly above the existing apartment stock that was primarily built more than a decade ago." Units have also proved popular in Auckland, hitting a new high in August of $539,900. Table 2: Average asking price by property type & region, August 2015 vs August 2014 All Urban Properties / Apartments / Townhouse / Units New Zealand / $498,200 + 25.4% / $535,150 + 36.5% / $552,350 + 14.0% / $420,650 + 24.3% New Zealand excluding Auckland / $348,800 + 6.8% / $433,050 - 0.2% / $394,700 + 10.6% / $275,100 + 7.7% Auckland / $588,950 + 30.0% / $566,350 + 49.1% / $714,600 + 9.9% / $539,900 + 24.0% Wellington / $352,050 + 1.5% / $379,350 - 16.3% / $408,350 + 9.6% / $269,900 + 8.6% Christchurch / $380,550 + 10.2% / $396,900 + 10.2% / $426,850 + 7.7% / $316,800 + 12.1%