The regional view of Auckland's property market

by Alistair Helm in ,

I hope I can be forgiven for focussing repeatedly on the Auckland property market. I know there are other regions of the country and they have quite unique property markets impacted by factors far removed form those of Auckland. The fact is though, that Auckland is the largest region, accounting for around 36% of all sales nationally added to which the data for Auckland is just that bit more comprehensive.

Up until now the analysis I have undertaken of the Auckland market has been restricted to seeing it as one market, however the data is available to analyse the region across what are still recognised as the historical boundaries of North Shore, Waitakere, Auckland City and Manukau. So I have crunched the numbers to paint a clearer picture of what has been going on across these four regions over the past 6 years. 

As a reference point I undertook some evaluation of the multiplicity of property data on the Auckland market recently and determined that the key data was the REINZ Stratified price index and the QV valuation index. However when it comes to the regional data there is no stratified data published by REINZ so I have used the median price data calculated on a 12 month moving average. This method provides a clearer view of trends.

But before looking at the price trends, let's start with volume sales. On average 2,100 sales a month are completed across the Auckland region with Auckland City representing the largest share at 39%.

In terms of sales trends over the past 6 years I have indexed sales to the 12 months moving average to January 2008 at 100. 

As can be seen the most active region has been the North Shore which rebounded first and most significantly from the property crash and has gone on to lead sales growth over the past 6 years. Having said that it was also the first region to peak in September last year and is now closing in on the same sales levels as 6 years ago.

The Waitakere region has seen a very strong growth in sales over the past 2 years although sales peaked in December last year and now have slipped below the base of January 2008.

The performance of the Manukau region is the weakest of the 4 regions suffering the largest fall off through 2008 and then again in 2010 and has not attained the level of sales achieved through the 12 months to January 2008. 

In terms of price appreciation I have used the same method I use for the Property Dashboard which is to calculate the variance between the current 12 months moving average median price and the prior 12 months moving average median price.

The chart below tracks the 6 years from January 2008.

The most significant region is Waitakere which has witnessed a recent marked rise in property prices starting in December 2012 at 5% year-on-year growth and rose very steeply for 12 months to hit 20% year-on-year growth before tailing off in the past 6 months.

The other regions have equally seen price appreciation rises of up to 15% over the past 2 years although all have seen a tailing off of growth. As with sales performance the Manukau region continues to lag the other regions of Auckland.