Barfoot and Thompson says Auckland property price rises over the past ten years are similar to the returns delivered by other forms of investment over the period.
Managing director Peter Thompson said: “The long-term trend shows that across the city as a whole, the average price for a three-bedroom home has risen by 78% in the past decade, or 7.8%a year. While this represents a solid return for those who have committed to home ownership over that period the level of increase is in line with the returns achieved from other forms of investment during a similar period.”
That comparison was made using the NZX Asset Class Performance Report. In the ten years to 2010, listed property returned 8.3%, corporate bonds 7.4%, government bonds 6.9%, New Zealand cash 6% and local shares 5.8%.
“What the analysis points out is the significant variation in price increases that have occurred across different areas of the city, and that the price rise over the past five years is only a third of the price growth experienced between 2003 and 2008 – 17% compared to 51%.”
Thompson said the areas where the average price had increased the most in the past decade were Central and West Auckland.
“For the Central area the price of a three-bedroom home has increased by 102% to $653,000, while West Auckland three-bedroom homes have doubled in price to $449,000. The attraction of the Central area is its well established infrastructure and its closeness to the central business area. In West Auckland’s case buyers have recognised property in the area represented value for money, offered lifestyle choices and saw there would be improved access to the central city through the development of rail infrastructure.”
The average price for a three-bedroom home in Franklin and rural Manukau had increased by 58% in the past 10 years, to $449,000.
“This area retains its rural heritage and represents lifestyle options that have disappeared from many other Auckland locations as the city has grown. As transport infrastructure improves between the city and the south, greater buyer attention is likely to refocused south.”
The area which has the highest average price for three-bedroom homes is the Eastern Suburbs, where the price growth in the past decade has been 70%, and the average price now stands at $826,000.