House price median in leafy belt up to $560,000

By MATHEW DEARNALEY

House prices in some of Auckland's leafier suburbs are holding their own after years of spectacular growth, although inner-city averages continue to be weighed down by cheap apartments.

The median price recorded by the Real Estate Institute for homes sold in the Eden-Epsom district climbed backed dramatically last month to $560,000, from a trough of $464,000 in June.

Although the median has been higher - $579,000 last October - it remains stratospheric after bounding 78 per cent from $315,000 in July 2002.

Auckland's eastern suburbs from Remuera to St Heliers eased back to $600,000 from a mid-price in June of $614,000, but remained 16 per cent higher than two years ago.

Mt Albert, encompassing the newly popular suburbs of Kingsland and Sandringham, has enjoyed a healthy increase of 33.8 per cent to $392,000 over two years.

Bargains are also becoming scarcer in more modest suburbs such as Ellerslie and Panmure, where the mid-point price leaped 66 per cent, from $198,500 to $330,000, in two years.

North Shore's most bullish suburb has been Birkenhead, with a 46 per cent rise to $410,000, although it has a way to go before reaching Devonport's $525,750.

Manurewa remains Auckland's cheapest house-buying zone - at a mid-price of $202,750 - although this was $16,000 higher than in January.

Central Auckland suburbs from Grafton to Pt Chevalier edged up from $278,000 to $293,000 but remained 16 per cent lower than a year ago after a high turnover of cheap apartments, many vacated by homeward-bound overseas students.

Auckland's 31 per cent increase over two years is slightly less impressive than the country as a whole, where prices rose 34 per cent.

But the city's overall median of $340,000 last month was still $75,000 higher than that of Wellington and $222,000 above Southland, where it cost markedly more to buy an empty plot of land than a house.

The median price of 25 Southland sections last month was $150,000 compared with $118,000 for 251 house sales.

Empty sections in Auckland, at a median of $183,000, were just $500 less than houses in Northland.

Bank of New Zealand chief economist Tony Alexander said a 22 per cent annual increase in Quotable Value's house price index was higher than his team predicted, but he still expected prices to fall in the second half of this year.

But a strong labour market meant this was unlikely to be too dramatic.

"It's not going to be anything horrible - to get a weak housing market, you need a weak labour market. We believe prices will drop, but only by about 5 per cent or so, from now until the middle of 2005."