It's true - a house for $125,000

This home in St Johns is going for just $125,000. Photo / Supplied

A "little cracker oozing ambience" in St Johns is going for just $125,000 ... a house nearby will cost you $139,000 ... another at Otahuhu is selling for $149,000. Welcome to Auckland's cheapest homes.

The median price for an Auckland house is $475,500 and the region is tipped to buck the national trend with steadily increasing prices.

But the Weekend Herald has discovered there are bargains to be had - if you're willing to take some risks.

However, Harveys agent Cherry Killgour, who is selling the "little cracker" in St Johns, warned of a triple-whammy: the financial downturn, mortgagee sales and leasehold land. She has sold one Auckland house for just $50,000, another for only $70,000.

She was "a bit miffed" to find she might be offering Auckland's cheapest three-bedder at St Johns, saying places in the city's Beaumont Quarter were going for a song and warning that 50 Caulton St drew a $20,800 annual leasehold land payment because only the house was for sale, not the land.

Other cheapies such as 7 Anson Place nearby in St Johns also draw big annual leasehold fees but 14 Church St in Otahuhu, selling for just $149,000, costs $1680 in annual ground rent.

Its agent, Mushtaq Sheikh of Barfoot & Thompson, said the house and land had a capital value of $350,000. The land was for sale so buyers could negotiate around that $350,000 figure for the entire freehold property, he said.

Alistair Helm of realestate.co.nz warned that banks might be tardy about parting with bulk funds for a large mortgage on leaseholds.

But Ms Killgour pitched 50 Caulton St as paying itself off, able to generate around $400 a week in rent and with 19 years left to run on the fixed leasehold.

Real Estate Institute figures for March showed the Auckland region's median stood at $475,500 against the national median of $365,000.

Realestate.co.nz shows 4291 Auckland houses for sale under $400,000 with stand-alone family houses selling for under $190,000 in Manurewa, Wellsford, Pukekohe, Mangere, Tuakau, Papakura and Takanini. Most are freehold.

Hugh Pavletich of Demographia, which studies housing affordability, scoffed at the concept of cheap Auckland housing and discouraged citing leasehold examples.

"Don't take notice of these things on leasehold land. People shun them like the plague.

"Auckland is grossly unaffordable and we're waiting for the Government to open up land supply," he said.

The Roost Home Loan Affordability report showed lower interest rates and flat to lower house prices helped improve home loan affordability in 21 out of 24 New Zealand areas last month.

Only Auckland Central, Tauranga and Kapiti Coast home loan affordability measures deteriorated because house prices rose significantly, overwhelming the positive effects of the March 10 floating mortgage rate cuts after the Reserve Bank's monetary policy loosening, according to interest.co.nz.