Auckland’s central city apartment market has increased in value more than any other area of the region over the last 18 months, according to Barfoot & Thompson's new list of real estate ‘hot spots’.
Auckland real estate company Barfoot & Thompson has compiled a 'top 20' list of suburbs that have experienced the greatest percentage value growth by comparing median sale prices* for the six months between August 2015 and January 2016 with the same period the previous year.
In step with the growing popularity of inner-city living and an upswing in apartment construction, Auckland Central, which is made up almost entirely of apartment sales, has taken the #1 spot. While its recent median of $544,000 is one of the lowest on the list, it achieved the highest percentage increase over time of 106.6%, up from $263,250 in the previous period.
Popular with first home buyers, investors and down-sizers
"Sales activity in apartments has grown considerably, with both completed homes and those available for purchase off the plans gaining lots of interest from first home buyers, investors and luxury down-sizers alike," says Barfoot & Thompson Managing Director Peter Thompson.
He highlights that new apartment developments now under construction, such as those at Wynyard Quarter and the central surrounds of Beach Road, had added to the Auckland Central sales figures during the recent period.
"With all this new development has come a new generation of apartments, with a greater focus on design and lifestyle and, in turn, a higher price point."
He says Barfoot & Thompson’s City branch has also recently introduced a special weekly apartment auction to handle increasing volumes.
Sandringham and New Lynn
Well-recognised hot spots Sandringham and New Lynn follow in second and third place on the list with impressive 69.4% and 47.2% increases in median value respectively.
In Sandringham this sees the median rise from $676,000 to well beyond $1 million, while New Lynn remains under the current Auckland median of $760,000,** moving from $451,750 to $665,000 during the period measured.
"Both of these suburbs are well-known growth areas. Sandringham offers city fringe living, with many villas and a village feel, while continued investment in New Lynn transport links, housing options, shopping and entertainment has put it firmly on the map."
New entries to the top 20
Reflective of an ever-changing market, 12 suburbs are entirely new to the top 20, following the first list released by Barfoot & Thompson in September last year (comparing median prices for the February to July periods of 2014 and 2015).
"The strength of this approach is how it brings together months of data into a more focused view, showing the bigger picture of what is happening across the market over time,” says Mr Thompson.
"Alongside other data and insights from salespeople, this list can help buyers and sellers analyse their local market at a suburb-by-suburb level. Sellers can see where demand may be strong or changing and buyers can better judge value for money.
"The list also builds an interesting view of the cycles suburbs can go through and the speed at which price can change.
"Many that featured high on our first list released in September 2015 have dropped right out of the top 20 this time. While these areas are likely to still be enjoying some value growth, their decline suggests that their growth may have peaked for now."
West Auckland hot spots
West Auckland suburbs are some of those moving up the list this time around.
Alongside New Lynn, with a median price now past the half-million dollar mark, another five West Auckland suburbs feature in the top 20 - the most of any region of Auckland.
These include West Harbour (4th with 39.3% growth), Kelston (9th with 33.7%), Massey (13th with 31.8%), Royal Heights (16th with 27.5%) and Glen Eden (18th with 26.1%).
With the exception of Glen Eden, all are new to the top 20, indicating strong growth particularly for top spot holders such as New Lynn.
* Median sale price (the middle price among sales in each suburb) was chosen over average sale price to provide a more balanced and reliable view of value growth. Due to the smaller groups of sales suburb by suburb, averages would have been more vulnerable to the impact of any particularly high or low value sales. The list excludes rural sales, sales of $5million and above, and suburbs with less than 20 sales during a six month period, including those with a high volume of section sales versus residential homes.
** Barfoot & Thompson’s January 2016 Auckland sales statistic.