In its latest newsletter on property trends Crockers says Auckland sales numbers are consistently down on the previous two years, while median sales prices have flattened to an average 10% premium on the previous year.
“The seasonal pattern of sales peaks in March, followed by falls as we head into winter, has been replicated this year (apart from a slight upward blip in sales numbers in May – a pattern some may have hoped would repeat the 2003 pattern of high volume through the winter).
“The margin on previous year’s figures, show an approximate 10% rise in median sales price over the past 12 months, with sale numbers just around 5% lower on average,” says Crockers.
The newsletter also looks at the gap between Auckland and Wellington in terms of affordability.
In its analysis Crokers says Wellington property prices have been consistently lower than Auckland over the years, with the gap widening considerably during the early to mid-90s.
“From 1997 onwards, Wellington prices started catching up with Auckland, rising from a low of 60% of the Auckland median price to peak at 85% of the Auckland median in late 2001. Since then, this margin has been fairly stable at around 20%.”
On rental levels Crokers says that based on latest figures on average Wellington rental figures “are indeed lower – in some cases dramatically”.
"However, Wellington rentals fluctuate from 10% higher than Auckland in the case of an unfurnished two-bedroom apartment, down to just 65% of Auckland rentals for a four-bedroom house.
“Clearly demand is high for one and two-bedroom apartments (both furnished and unfurnished) in Wellington, with these showing the smallest variation from Auckland rentals. The largest variation is in the larger luxury housing category, where Auckland rentals clearly command a premium across the board for both three and four-bedroom houses and apartments."
Crokers says the Ministry of Social Development (MSD) recently published report discussing housing affordability, with the finding that 24% of households in New Zealand are spending more than 30% of their income on housing (this figure was just 11% in the late 1980s).
“Current data suggests that this figure will be even worse when statistics are analysed for recent years, with property sales figures rising faster than income levels. This may, however, explain in part why rental levels have not kept pace with the rises in property values."
In June 2004, the Auckland median property value was approximately 10 years’ average income, compared to about 8 ½ years in Wellington.
“The MSD report shows that, in terms of affordability, Wellingtonians are clearly better off than Aucklanders, with half of all tenants in Auckland paying 30% or more of their income in housing costs, compared to 40% of Wellington tenants. Those who own, are in a much better position – but again, Wellington fares better than Auckland in the affordability stakes.”
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