Could Otahuhu, traditionally one of Auckland's most working class suburbs, soon have BMWs and Audis parking cheek-by-jowl on its main street as their owners sip lattes at curbside cafes nestled between chic boutiques?
Otahuhu may not quite be there just yet, but it could well be the next Auckland suburb destined for price-escalating gentrification judging by the result of one of last week's auctions in the suburb.
The house at 67b Nikau Rd was an old bungalow that had been given a bit of a makeover.
Freshly painted and with a new kitchen and bathroom and recently polished wooden floors, the three bedroom house with double carport had been purchased in September last year for $352,000, according to QV.co.nz.
It's current rating valuation, issued after September's sale, was $445,000.
Last week Bayleys sold it at auction for $612,000.
Extraordinary perhaps, but it was still the cheapest stand alone house that Bayleys sold at auction in Auckland last week.
The only property that went for less was a Kingsland apartment that went for $602,000.
The most expensive sale was an Epsom house that sold for $3.08 million.
To see the full results of Bayleys Auckland auctions last week, which includes sales in Albany, Forrest Hill, Devonport, Glenfield, Bucklands Beach, Epsom, Mission Bay, Mt Roskill, Red Beach and Grey Lynn, with photos of all properties, including those that didn't sell, click on this link.
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19 Comments
One assumes that folk living there are families earning the median wage at least, and in reality maybe less .
After Tax on an 80% mortgage they could not afford the mortgage at 6% unless they dont have children , dont eat or travel by car .
This market has lost all sense of rationality
That's it, I am not coming back to Auckland.
We can buy a 4-5br well-built home here with pool and within 5km from CBD for less than a million bucks, yearly rates would be about $1500/yr, way better public transports and more cycle tracks than Auckland, similar pay scale. AND we don't have a sulky mayor who walked out when someone said something truthful about him!
Did you know
As people near retirement they turn their mind to their accomodation needs for the remainder of their lives, which inevitably means selling their existing tired-old-and-cold high maintenance home and looking for a new or near new abode that meets the following criteria
(a) low maintenance - probably brick & tile
(b) easy access - single level - no steps - no stairs
(c) section not located on mountain goat country
(d) easy to maintain grounds - small lawn - no garden - no swimming pool
(e) possibly an apartment?? not sure about that - altho I'm told so
(f) easy access to hospitals and medical facilities
Look at the passing parade of homes for sale on the NZherald slide-show you see the vast majority do not meet that criteria
Which means a lot of retired or retiring people will be moving out of Auckland away from family and friends
Not true, got my fathers coming up for sale in Campbels Bay, ticks all the boxes except has 3 steps at the front and rear entry. Its also in all the major school zones so its Gold and about 10 minutes to North Shore Hospital. Ideal for those downsizing but its a 2 bedroom unit that still going to be to expensive for first home buyers. Rare as hens teeth in an area where everything is now over the $1M. Make me an offer.
It is a crappy street full of HNZ houses and other rentals. An investor relying on capital gain, not to live in themselves, and possible intensification because of the unitary plan. Parts of Otahuhu will improve and gentrify, but it has to have home owners to raise the overall tone of a street, with people who actually look after their houses. Nikau St won't improve as much as other areas in Otahuhu.
Mangere East near Middlemore Hospital will gentrify because of it's location and it being home owners, not so much the HNZ areas.
First home buyers in Auckland have to now look at Papakura, Pukekohe, Tuakau, Helensville, rather than the poorer suburbs closer to the city.
Auckland fever ain't going to end pretty...
Many properties are being bought purely for speculative purposes like the one above.
Consider that in mid 2012 you could buy a nice villa on a cross lease near Eden Park for just on $700k, and a bungalow on a full site in Sandringham (across Balmoral Rd) could be purchased for in the $600s.
Many regional areas are still on their lows, especially vacant sections, which are selling for a fraction of their 2006/7 prices (sometimes under a 1/3), eg Te Anau, Queenstown, Northland etc.
Time to cash out of Auckland.
It's the biggest bubble NZ has ever seen that's for sure.
There is growing concern in Australia about their housing bubble as well,
http://www.macrobusiness.com.au/2015/03/australia-one-worst-housing-bub…
With 1.2 billion Chinese, 1.2 billion Indians, 65 million Brits, wealthy Americans, Russians, South Africans etc etc who all have full unfettered purchasing access to NZ and Auckland real estate, 50k immigrants, the bubble is not going to burst anytime soon.
The RBNZ still has plenty of scope to cut interest rates if house prices start falling, and banks themselves have plenty of margin to drop rates even if the OCR remains the same.
Interestingly, a number of regional cities and towns already have falling house prices. Due to no international buying interest, and no wage growth.
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