As the Super City evolves, so too is its housing market: A guide to future-proofing your property purchase in 2019
What’s not to love about Auckland during summer? The roads are less busy. The blue waters of the Waitematā Harbour and Hauraki Gulf sparkle against the backdrop of Rangitoto. There are days at the beach, and long, warm evenings accompanied by the shrill call of cicadas and wafts of barbecue smoke.
The New Year is a time to enjoy the holidays, spend time with family and to make plans for new beginnings: work less, exercise more, eat more healthily, look for a new job. It’s also a time to plan bigger changes, such as buying a new home, and this year – more than at any time for several years – the housing market stars are aligning, meaning 2019 could be an ideal time to make your move.
Economically, the outlook for buying a new home is as bright as our summer skies. Interest rates are at historic lows; we’ve hit peak employment; and the febrile days of the overheated property market have cooled.
Falling net migration and the ban on foreign buyers are having an effect. Over the past year, FOMO (Fear of Missing Out) has largely evaporated; people are taking their time to secure a perfect family home, and Auckland house prices have plateaued. Building consents are at record highs and the government is pitching in with KiwiBuild. Altogether, the delicate balance of supply and demand is levelling out, enticing more home buyers into the market. According to a recent ASB housing confidence survey, the number of respondents who are optimistic about buying a house is at a five-year high. And that was before the Reserve Bank gave further cause for cheer by relaxing loan-to-value restrictions, making it easier for some to secure mortgage lending.
“We’ve definitely seen perceptions in the housing market change,” says Mike Bayley, managing director, Bayleys Real Estate. “After a period of rapid house price inflation, we’ve returned to moderate, more sustainable growth. Backed by a strong economy and major, ongoing infrastructure investment in the region, Aucklanders have good reason to feel confident about buying and selling property over the coming year.”
But before you let the summer sun and fine fiscal outlook rush to your head, it’s worth spending a few minutes of your summer downtime to look at some key considerations for buying a home in Tāmaki Makaurau in 2019.
While the old real estate mantra holds true, and location is the No.1 priority for home owners, the No.1 reality for buyers is price. There’s no point looking for a home in sunny Herne Bay (average price $2.5 million), if your budget is more Sunnyhills (average price $1.2 million).
Affordability, of course, is relative, and internationally Auckland’s homes are still some of the world’s most expensive. But after years of double-digit house price inflation, the recent softening has seen affordability improve. According to Massey University’s quarterly Home Affordability Report last September, based on figures from REINZ, Auckland saw an overall improvement in affordability by 5 percent over the previous 12 months. That’s despite a small rise in the seasonally-adjusted median Auckland house price over the same period.
The figures are also just an average across all of Auckland. During the year to October 2018, some suburbs experienced falls in median prices: down 14 percent in Franklin District, 7 percent in Manukau, and over 5 percent in North Shore City.
Going into the New Year, the increase in housing affordability is a trend that seems set to continue, as wages increase and house prices maintain relative stability as more stock becomes available. This means that if you’re looking for a more affordable home, or a cheaper rental property, 2019 should be ripe with opportunity.
Over the past two decades, Auckland’s population has doubled to 1.6 million. As more people have flocked to the city, the housing landscape has changed dramatically, as has Aucklanders’ expectations of their homes and lifestyles.
Across the city, many quarter-acre sections with lawns and fruit trees have been subdivided, replaced by infill housing and easy-care landscaping.
As the baby boomer generation ages, empty-nesters are selling up and buying smaller, more manageable properties. Young people at the start of their careers want accommodation close to the hustle of the city. Families are embracing medium-density living close to parks and beaches – and always with an eye on a good school zone. Many want decking and outdoor living areas, not a veggie patch and compost heap.
Reflecting Auckland’s changing footprint, both local and central government are racing to keep up. We have the Unitary Plan, The Auckland Plan (which looks ahead to 2050), the Mayoral Housing Taskforce and the Auckland Transport Alignment Project. KiwiBuild is promising thousands of new homes; regeneration is happening across the city and major infrastructure initiatives are underway.
The basic premise of the projects is to encourage medium-density living connected by efficient transport systems, and together they are redrawing the map of Auckland. If you’re looking to buy in 2019, it’s worth investigating how these changes are likely to impact your choice of home, suburb and schools into the future.
Nowhere are the effects of Auckland’s population surge being more acutely felt than in the education system, as many of our schools struggle to cope with swelling rolls.
To meet the increase in school-aged children, over the next four years 196 new classrooms are being provided at 31 schools, at a cost of more than $21 million. New primary schools are being built in Takanini, Flat Bush, Hobsonville, Pukekohe, Drury, Orewa and Hingaia. And there are plans to build between eight and 10 more, plus four to five new secondary schools, near Drury and Pukekohe in the south, Westgate, and Albany and Orewa further north.
According to the most recent census figures, 65 percent of families (with either one or two parents) in Auckland have children. It’s why school zones are such an important factor in the housing market, and why if you have school-age children you must thoroughly research a property’s school zones before purchase.
Over recent months, three of Auckland’s most popular high schools – Glendowie College, Mt Albert Grammar and Western Springs College – have tightened their rules regarding out-of-zone applications; with Mt Albert Grammar taking the extra step of excluding enrolments from a nearby KiwiBuild development.
The golden Double Grammar Zone is also increasingly under pressure. Developers understand the cachet of building within the boundaries of Auckland Grammar and Epsom Girls Grammar, which can add hundreds of thousands of dollars to the price of a home. Local Epsom MP David Seymour has already highlighted the extra burden new medium- and high-density developments in the area are likely to have on the two state-funded schools.
Increasingly, enrolment status in sought-after school zones is going to be more rigorously enforced. In today’s marketplace, if you’re purchasing a home with an eye on the options it provides for your children’s education, you must ensure the future eligibility of your address under local schools’ enrolment criteria.
At 381 pages, the Auckland Plan 2050 is not a light summer read, though it does contain attractive illustrations and a poem. It also has lots of informative maps, showing the council’s long- and short-term plans for growing the city.
On its own, the plan highlights urban growth hotspots from Wellsford and Warkworth in the north, to Pukekohe in the south. The breadth and scope of the new developments are immense. When viewed through the lens of the $28 billion Auckland Transport Alignment Project (ATAP), the changing map of the city’s housing hotspots becomes clearer.
Much has been written about the light-rail project linking the city to Māngere and the airport. This proposal has its critics, but it’s about more than the transportation of airline passengers. The light-rail corridor is the target of rapid housing expansion, and the link will boost development along its entire route, including in Mt Roskill, Onehunga and Māngere.
“Light rail is the centrepiece of Auckland’s rapid transit network to give people more travel choices and ensure the city is fit for the growth that lies ahead,” says Steve Mutton, NZ Transport Agency’s director of regional relationships.
“The city centre to Māngere light-rail link has much more ambitious goals than simply moving people between the city and the airport. They are the light rail’s bookends; what happens in between is the key reason we’re building it.
“The corridor includes large areas of publicly-owned land with high redevelopment potential to increase Auckland’s housing supply and support urban regeneration. The government is currently developing a mix of state housing, affordable homes and market homes along the corridor in Mt Roskill and Māngere. These projects, and others like it, will benefit from quick and easy access to light rail – connecting with heavy rail, buses, cycling and walking – which means a connected system that gives people more choices.”
Housing New Zealand subsidiary HLC has already started work on seven major developments in the Māngere area; when finished they will provide over 7,000 new market-value and affordable homes, in addition to 3,000 new state homes. They are much needed in an area that’s forecast to grow by 50 percent over the next 30 years, to 300,000 people.
Through the light-rail link, and a planned new rapid bus transit corridor from the airport to Botany, via Manukau, residents in the area will have easy access to public transport north to the city, to the south and east.
Further south, offering a rural lifestyle close to the city, Pukekohe is set for significant growth under the Auckland Plan 2050, with 1,700 hectares of land earmarked for urban development. Key to the area’s growth is the electrification of the line between Papakura and Pukekohe. While it won’t cut commute times, it will mean that passengers will only have to board one train and won’t have to change at Papakura. Add new stops at Paerata and Drury, a $16 million bus and train station in Pukekohe, with an 87-vehicle park-and-ride, and life in Franklin’s green pastures suddenly seems even greener.
After years of planning, work has begun on the Eastern Busway. The $1.4 billion scheme is expected to take two years to complete and when finished will provide a dedicated, gridlock-free bus route between Panmure, Pakuranga and Botany town centres. By linking with the new train station at Panmure, it will cut the commute time from Botany to the CBD to 40 minutes and have a huge impact on life in this area.
“AMETI (Auckland Manukau Eastern Transport Initiative) isn’t just about bus routes, it’s about connecting town centres and communities,” says Duncan Humphrey, project director of the AMETI Eastern Busway. “It’s going to make a significant difference to residents’ access to things like jobs and recreation.
“And it’s not just about the speed and reliability of the transport – there’s a lot of urban design that’s gone into the project. As well as modernising the town centres, we’ve green spaces, cycle and walking paths and other improvements to the look, feel and liveability of the areas along the route.
“It’s about ‘Place Making’, which means encouraging people to be in spaces through high-quality urban design. We expect this project will have a big effect on the potential of east Auckland, and lead to a significant increase in development.”
NORTH and WEST
Just as the light-rail line to the airport promises a surge in growth along its route, the line heading towards Kumeu, via Westgate and Lincoln Road promises huge potential in the northwest.
The areas around Whenuapai, Westgate and Kumeu have been earmarked as future urban areas, with 14,000 new homes and 75,000 more residents planned over the coming decades. Linking them to the city will be a light-rail line that promises a commute time of 30 minutes from Westgate to the city.
Meanwhile, the planned extension of the Northern Busway to Albany, with a proposed new station at Rosedale, and dedicated bus lanes between Albany and Silverdale, will help ease the commute for city workers who plan to make the North Shore their home.
LOOK TO THE FUTURE
Auckland is growing for one very good reason: it’s a great place to live. But as the city expands, and we move into an era of heightened development, we must take a closer look at the suburbs and areas we call home.
If you’re planning to buy or move home in 2019, study planned infrastructure – new roads and public transport projects have a huge effect on how we navigate our city. And read the Unitary Plan. Leave it too late, and you could discover the home you assumed was in the middle of a “Residential – Mixed Housing Suburban” zone actually borders one earmarked for hundreds of apartments. Ensure the school zone you’re prepared to pay a premium for isn’t about to be curtailed.
As we head into the last 12 months of the 2010s, everything points to it being a great time to make a move. But as you make your plans, just remember that when buying in Auckland in 2019, it’s a tale of two cities – the one you’re buying into today, and the one that you will live in tomorrow.