Dita De Boni: Property bubble losing pressure

Illustration / Anna Crichton

Are Auckland house prices finally past the point of maximum stretch?

There's no trouble in a bubble when you're floating along," sings Mickey Mouse in Pluto's Bubble Bath, and I suppose that's true of your average soapy globule.

But in reality, there's a heap of trouble when you're floating along mindlessly in a property bubble that is fast deflating, as we in Auckland city are about to find out.

New statistics from property valuers QV this week confirmed what anyone looking to buy an Auckland house can observe for themselves: the market is cooling - albeit slowly. There are fewer auctions; properties are being passed in without a sale; more "price by negotiation"; more eager-to-please real estate agents. With interest rates set to rise, the bubble will undoubtedly sag even further.

Of course, prices in the inner suburbs are still horrendous, ridiculous and absurd. They're still up almost 15 per cent on a year ago, and close to 32 per cent higher than they were in 2007, the last time the bubble was full to bursting. But they have climbed less than 2 per cent in the latest quarter, which, to hear it woefully told, is almost akin to going backwards.

Apart from the stats, how do we know this? Well, we have joined the throngs of people traipsing around the city of a Saturday or Sunday afternoon - children whining in the car, sheets of paper everywhere, shoes constantly on and off - to look at what's on offer. To complicate matters, we've got Mars and Venus working against us: what he sees as charming and old fashioned, I see as mildew-soaked. What I see as modern and easy on maintenance, he sees as soul-crushing. And so forth.

That aside, I confess that we have a reasonably well-stuffed purse with which to go shopping. Our current house, bought on a moderate budget nine years ago in a very average Auckland suburb (variably described as Three Kings, Balmoral and Eden South) is now classed as "Mt Eden" - with all the good fortune that entails. Even so, we still face a uphill battle to stay in our area if we don't want to be paying off a mortgage until we turn 95.

But real estate agents do seem a little less complacent then they were. One called up to ask if we were interested in a home we had seen at the weekend. The house was one that's not unusual in this end of town: planned and executed with all the precision of a dog's breakfast. Stairs leading nowhere, bedrooms accessible only via the bathroom, unnecessary mezzanine floors and vast numbers of cupboard-sized bedrooms. The answer was no, because a) husband and son almost broke their ankles on the stairs that led nowhere, and b) $1.4 million for that house was horrendous and absurd.

The agent was flabbergasted that we weren't jumping at the chance to live in an Escher painting with a great postcode, and couldn't help asking how much His Nibs thought it was worth (answer: however much it would cost to tear down and rebuild properly).

None of which is to say he won't find a willing buyer, nor that we won't have to pay a ridiculously inflated price for our next home. Our general area will, no doubt, continue to be expensive. But maybe, just maybe, we're seeing the first signs of house prices and wages coming back into vague alignment, and Auckland becoming a little more affordable for everyone.