Buyers unwilling to wait

Maria Moran, Alejo Ramirez and baby Benicio are house-hunting in Avondale. Photo / Doug Sherring

Fears that housing market will just keep climbing

Househunters are continuing to scramble for property - undeterred by Government promises that property prices will fall in the next three years.

The Auckland Housing Accord in this week's Budget pledged 39,000 building consents to deal with Auckland's housing shortage.

Yesterday, young couple Alejo Ramirez and Maria Moran were viewing an Avondale townhouse which promised "perfect affordable entry" at $399,000 and were not prepared to wait for any cooling in the market.

"Our budget is $400,000 and it is impossible to find anything. Three years ago, this house would have been up for $270,000. We were looking to buy two years ago and we're kicking ourselves we didn't buy because the houses are so much more expensive so we feel we better buy now because we know it's going to keep climbing," Moran said.

Her partner agreed and did not believe the accord would affect the Auckland market.

"They have promised more social housing but we have normal office jobs and I don't think we would qualify. It's really difficult for first-time buyers to buy in an auction because investors can afford to pay more," he said.

ASB Bank chief economist Nick Tuffley said he expected average Auckland house prices to rise 9 per cent over the next year, down from the 13 per cent increase since last May. "It may slow slightly but that's still a very, very solid pace of growth."

He said population growth had outstripped new housing consents for years but he expected construction to pick up. "Over time that will start to alleviate some of those supply pressures but that won't happen overnight."

John and Joanne Cunningham were also at an open home for a newly renovated Grey Lynn house with a CV of $740,000.

"The new consents won't fix the squeeze in areas like Grey Lynn," John Cunningham said. "There is no land available here. It will only affect places like Botany or South Auckland," he said.

Agent James Ju said it was the sixth open home he had held and 37 groups had viewed so far.

"About 90 per cent are first-home buyers and 10 per cent investors. I sold a two-bedroom house in Mt Albert recently for $475,000 that had 50 people through on the first day," he said.

On the top end of the market, a burger baron's Ponsonby home sold at auction for what is believed to be a record price of $2.75 million for a 414sq m property.

Entrepreneur Josef Roberts turned Burger Fuel from a sole Ponsonby store to a global franchise with outlets in Australia, Egypt and Iraq. His Tole St house, just a few blocks from the Ponsonby Rd burger joint, was sold at auction last week for a neighbourhood record, according to realtors Ray White.

Simon Damerell of Ray White refused to discuss the Tole St sale but said Ponsonby and Grey Lynn generally had a fixed supply of houses, and prices would keep rising.

PropertyIQ research director Jonno Ingerson said the average value of housing stock in Ponsonby, and not just recently sold houses, was $1.15m.

Damerell said nothing in the Budget would affect property values around Ponsonby.