Property Report: Jonno Ingerson - Auckland vs rest of country - a more detailed look

There are nearly 418,000 houses, flats and apartments in the Auckland supercity. This means Auckland comprises 31.1 per cent of the country by number of properties. Photo / Herald On Sunday

We all know the Auckland property market has been competitive. But is Auckland really that different to the rest of the country? We take a look at the key elements of the market to sensibly see whether the hype is justified.

There are nearly 418,000 houses, flats and apartments in the Auckland supercity. This means Auckland comprises 31.1 per cent of the country by number of properties.

You may have seen statistics showing the average current value of properties in the Auckland supercity sits just under $645,000. This is the highest value in the country, with the other main centres ranging from $284,000 in Dunedin to $446,000 in Wellington.

Over the past year Auckland values have increased 12.8 per cent, with Christchurch city the next highest main centre at 10.8 per cent. Beyond that, most have risen less than four per cent.

This trend continues when looking back five years, which corresponds to just after the peak of the market, with values increasing 19.5 per cent in Auckland compared to 5.6 per cent across NZ.

However, if we take it back to over the past decade Auckland has increased 87 per cent compared to 88 per cent for all New Zealand. In fact, many other parts of the country increased in value much quicker than Auckland during the boom years of 2003-2007. After this time the rate of increase skyrocketed in Auckland compared to the most of the country, bar Christchurch.

Now, if we start to get into more detail, we can analyse how other aspects influence the market across the country.

A key area we can look at is sales numbers. Auckland's sales this year are about 37 per cent of all NZ sales, which is more than the 31 per cent share of properties.

However, if we look at it related to the number of properties in each area, then the turnover in Auckland isn't leading the way. The highest percentage of turnover is in Waimate District, although the number of properties there is significantly lower. Most areas surrounding Christchurch have higher turnover, as do Central Otago, Queenstown Lakes District, Nelson and Waipa. However, the turnover is higher in Auckland than in the other main centres.

Based on the number of properties on the market in July, as a percentage of the stock in the area, then Auckland has the lowest percentage of properties listed for sale, except for Christchurch City.

This shortage of listings is particularly bad in central Auckland, but overall not that much worse than Wellington, Dunedin, New Plymouth and Nelson.

With Auckland's property market issues related to a lack of supply, and there being considerable noise around ramping up new builds, another aspect to look at is building consents.

Consent numbers for new houses was at a high in the years leading up to the 2007 market peak. Auckland dropped more than any other region during the GFC with consents down 75 per cent. In 2013 the number of consents in Auckland was 70 per cent higher than it was during the post-peak low.

This level of increase is among the fastest in the country, although well behind Taranaki which is 164 per cent up on the low, Nelson which is 119 per cent up and Canterbury which is 158 per cent up.

The issue in Auckland is that even though the number of consents for new houses has increased, the actual number is not enough to satisfy the underlying demand for more houses, especially with the growing population.

According to Statistics NZ the population of Auckland was just over 1.5m at the end of 2012, making up 34 per cent of New Zealand's 4.43m. While New Zealand's population has grown 4.8 per cent in the previous five-years, Auckland's has grown eight per cent, the fifth fastest Territorial Authority in the country. No surprises that the top of the list is Selwyn District at a growth of 16.5 per cent but even Hamilton grew faster than Auckland at 8.3 per cent.

The population in Auckland grew by 111,500 people between 2007 and 2012. With a total number of residential properties of nearly 418,000 this equates to 3.6 people per property. Even if that number of people per house had stayed constant since 2007, then we would have needed another 30,890 properties. But according to building consents there were only 25,850, a shortfall of 5,040 properties.

Overall we can see that values in Auckland have definitely been increasing at levels beyond what most of the country can match. However, when we look at the markets side by side we can start to see that relatively Auckland doesn't have the highest turnover in the country nor is boasting a significant lack in listings in comparison to other areas. Yes the market is strained with a need for new properties, especially when looking at the growing population, but again these issues aren't totally confined to Auckland.

* Jonno Ingerson is Research Director at PropertyIQ.

PropertyIQ is a market leading property information, data and analytics company. It owns and operates QV.co.nz, RPNZ and other property data solutions providing insight to a broad range of industry sectors including banks, insurance companies, real estate agents, valuers, government agencies, and everyday Kiwi consumers looking to buy or sell property.