Property prices surge in areas west of CBD

Avondale, New Windsor good areas for affordable homes, says Quotable Value. Photo / Martin Sykes

A cluster of suburbs west of the Auckland CBD has surged ahead of an otherwise stagnating Auckland housing market.

New Windsor, Green Bay, Waterview, Avondale, Glendene and Blockhouse Bay swept most of the top 10 Quotable Value average price rises in the latest quarter, as reported in the Property Report liftout in today's Herald.

QV spokeswoman Glenda Whitehead said there were areas, some with strong demand not matched by listings, creating "fierce competition".

"Typically, these are suburbs close to the CBD. Activity in many of the outer suburbs remains flat."

But even where prices had risen, activity was patchy, she said.

Many of the suburbs - particularly Avondale and New Windsor - were good areas to find affordable family homes, she said.

"Avondale is a little like Onehunga 10 to 15 years ago. It is going through a regenerative phase," she said.

New Lynn, Mt Roskill, Mt Wellington, Ellerslie and Panmure were other options that offered value.

The price rises in the six western suburbs ranged from 3.4 per cent in Blockhouse Bay to 5.5 per cent in New Windsor. The other four suburbs in the top 10 were Bucklands Beach, Sunnyhills and Dannemora in the east and Forrest Hill on the North Shore.

Region-wide, Auckland's median sale prices dropped 2.8 per cent in the quarter to September.

New Zealand Institute of Economic Research principal economist Shamubeel Eaqub said the economic context was lacklustre.

"The housing market recovered through the first half of 2011, from bleak to only terrible. But even this modest recovery has faded in recent months," Mr Eaqub said.

"We predict, at best, the housing market will remain in a holding pattern in the next year. In the case of a darker global scenario, the housing market would sink again."

The housing market stood on the poor fundamentals of weak population and income growth, he said.

But Auckland remained the best of a poor lot, the only place in the North Island besides Wellington having suburbs whose house prices had recovered to 2007 levels.

Grey Lynn and Westmere, just west of the CBD, are now more than 10 per cent above their values four years ago.

In Hamilton, prices inched upward but remained well below peak levels. Melville, Bader and Flagstaff led the rise among the city's suburbs, while Te Aroha posted the Waikato's strongest growth, at 6.1 per cent. Hamilton City's median house sale price in the quarter to September grew 2.9 per cent.