Auckland residential market continues to firm

The Auckland property market in June saw the median price drop from $464,000 in May to $461,000, and sales numbers down from 2218 to 2096.

However, Crockers research said the market is stronger than it has been for some time, compared with 2010. At 11,311, sales numbers for the first six months of the year are at their highest since 2007, and the June 11 figure is 27% higher than the 10,305 sales closed in the same month last year.

Similarly, the median sales price is up 3.6% on last June, the strongest house price inflation since 2007.

The movement is greater in Auckland than the rest of New Zealand, where the median sales price is up 2.1% on last year (to $360,000) and the number of sales closed is up 14% compared to last year (to 5229), Crockers said.

Rentals in the Auckland two-bedroom market have been stable for the past three months at about $365 per week, just over 20% higher than the average for the rest of New Zealand.

The three-bedroom market has also stayed steady over the past three months, following significant rises in the earlier part of the year off a January low. In June the average rental price was $486 per week, 30% higher than the national average of about $350 a week.

Crockers suggests that with the Auckland property market strengthening this year, “it’s worth taking another look at Auckland versus the other metropolitan centres, in terms of the relative returns rental properties offer.”

Dunedin rates best for rentals

Returns on rental properties declined in all four centres to the end of June 2007 (on the back of fast-rising prices), before recovering. Dunedin, especially, took off and remains the best major centre in New Zealand in which to own rental property.

Auckland returns have been slower to recover and for the past three years have been at the lower end of the four-city range.

“One reason for this is that while Auckland rental levels have risen, in line with the other centres, so has the city’s property prices – at a time when other cities have experienced minimal price rises.”

In comparing the cities, it should be noted that the data for Christchurch is based on available information and that the property market in that area will obviously have been affected by earthquake events in the past year.