South Auckland is experiencing some of the largest leaps in housing costs. Photo / Mike Scott
South Auckland is experiencing some of the largest leaps in housing costs. Photo / Mike Scott
There's concern rising house prices in Auckland's lower socio-economic suburbs are forcing families out of their communities - and could be damaging the economy.
OneRoof data reveals high-demand, white-hot prices and densification has seen once-affordable neighbourhoods in the region skyrocket out of reach for blue-collar workers.
The average value of a house in Papatoetoe, Māngere, Ōtāhuhu and Manurewa are on the brink of tipping over into the $1million price bracket – up from between $540,000 and $610,000 in May 2016. Onehunga and Avondale have proven to be two of the hottest suburbs to buy in. Last month a house in these areas cost more than $1.3 million dollars and $1.13 million respectively.
That's up from $915,000 dollars for Onehunga and $825,000 for Avondale, just last year.
OneRoof Editor Owen Vaughan said many buyers who previously dismissed these neighbourhoods are now moving in with a lot of money - changing the tone and nature of the suburb – and forcing out families who used to be able to rent or buy there.
"Ponsonby is the case in point. Over the space of about 20 years it went from being a very working-class area, to yuppie central."
An economist said gentrification was hurting Auckland's economy.
Sense Partners' Shamubeel Eaqub said families who can no longer afford to live in the community they grew up in are moving deeper into south or west Auckland – or having to shift out of the region altogether.
Onehunga (pictured) and Avondale have proven to be two of the hottest suburbs to buy in. Photo / Fiona Goodall
Eaqub said it's extremely inefficient – because those people then have to travel across the region to reach work or school.
"The congestion has a really high cost. Looking at wider New Zealand, we spend about one per cent of GDP each year on lost income because of time spent sitting in traffic."
He said pushing essential labourers to the edge of the region is also bad for business.
"What I hear from a lot of businesses I advise is that people are finding it very hard to recruit in the middle of the city. People who live out in places like Takanini don't want to travel into the CBD, but if there's a job offering in Papatoetoe they'll come".
Maungakiekie-Tāmaki Ward's councillor Josephine Bartley warned rampant gentrification in Auckland is particularly hurting Māori and Pasifika.
South Auckland – which is experiencing some of the largest leaps in housing costs – is also home to New Zealand's largest Pacific population, according to Stats NZ.
Bartley said families who earned too much to qualify for a state house but can no longer afford to rent in their area are being priced out by wealthier buyers, tenants and house flippers.
"They're usually the families that make up the backbone of the community. They go to the churches, they are on the school boards – they're active, involved and working. But they're no longer to stay in that community, because they can't afford housing."
Bartley claims more needs to be done in the affordable rental space by Government.
"Whether that means Kāinga Ora getting involved or rent controls - something needs to happen".
