Auckland housing prices dip 30% as affordability issues bite

Surprising price rises recorded in some parts of Kiwi metropolis as well

Auckland view from Mount Victoria. Koki Takemoto/Shutterstock

Central Auckland suburbs registered some of the biggest housing price falls over the last year, Stuff reported.

Sales activity in New Zealand’s largest metropolis decelerated in the six months to the end of March, compared to the same period in the previous year, according to data from the Real Estate Institute.

The steepest decreases were recorded in Mount Albert and Royal Oak, where median prices dropped by as much as 31.2 percent. The former saw median dwelling values descend from NZD1.17 million (USD777,300) last year to NZD805,250 this year, while the former dipped from NZD1.16 million to NZD865,000.

Long Bay recorded the third steepest fall at 24.8 percent.

Price weakness in the central suburbs came as no surprise to Bindi Norwell, Real Estate Institute chief executive. “Suburbs such as Mount Eden, Westmere and Herne Bay have been slowly declining in price for a while now,” she said.

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Housing unaffordability in Auckland has been driving lower prices recently, noted Infometrics economist Brad Olsen. “We expect that potential buyers have hit the limits of what they’re able to pay for housing – they’d like to pay more to secure a house, but simply can’t access the funds for higher and higher prices. So as a result, vendors are readjusting their prices lower to secure a sale in some instances.”

Just as unexpected were the price rises in some parts of the Kiwi metropolis. The median price in Takapuna in the same period hit NZD1.3 million, up from NZD1 million last year.

Onehunga ranks second with a median price rise of 19.4 percent.

“Given the cooling house price growth which has been recorded on Auckland’s North Shore recently, the latest figures may come as a surprise to some,” said Norwell.

Rising prices were also tracked in the suburbs of Morningside, Rosehill, Oteha, Milford, Glen Innes, Grafton and Stonefields.

“As for Glen Innes, the Tamaki Regeneration programme is likely to have played a part in the significant price growth there,” explained Norwell, referring to the large urban transformation project.