Property Report: Twenty years on - How prices have moved

Waiheke Island's median sale prices have risen 582 percent in 20 years. Photo / Supplied

When Frank Sinatra sang in My Way, "regrets- I've had a few", he probably wasn't thinking much about real estate.

But how many homeowners look back over the years and regret they didn't spend just a little more money to find a house in that hot suburb... because the better the area the greater the price appreciation, right?

Well, perhaps so in dollar terms. But the statistics suggest that while prime areas with the most expensive houses may be the safest places to put your money - and the sort of
spots to lure moneyed folk like Frank - you may do better in the long term in more modest suburbs that are set to turn.

The trick, of course, is seeing the winds of change, anticipating the sort of gentrification process that turned Ponsonby from cold-hole flats to prime residential in barely a decade. But the reality is that most of us who enjoy house price rises well above the average are just lucky.

Like many of the people who bought in suburbs such as Onehunga and Penrose back in the 90s, for example. Or, even better, the bach-and-mansion mix of hideaway Waiheke Island.

When Property Report delved back through Real Estate Institute sales data over the past 20 years, the Hauraki Gulf islands - where Waiheke Island dominates with 95 per cent
influence - stood out like Bean Rock at low tide.

Back in the late 80s and early 90s, Waiheke was still a sleepy backwater, made more for weekend escapes than permanent homes and prices were among the lowest in Auckland. The explosion since then has been remarkable, even if the past four years have put a stop to the surge.

The bare-bone numbers owe much to new pads for the wealthy and renovation projects which have transformed modest baches, but they are certainly impressive: a 582 per cent rise in the median sale price in 20 years, leaving every
other North Island area in its wake.

Over in the big smoke, the two "central-south" Auckland suburbs of Onehunga and Penrose stood out - with neighbours Ellerslie and Panmure - as the areas of mainland Auckland to show the strongest house price gains.

But some qualifications: the institute's data is based on median prices, which can give distortions when applied to small geographic areas with limited sales. Spread over 20
years and using sales recorded over three-month spans evens out most of the bumps, but the results should still be treated as a rough guide only.

Complicating things further is the institute's traditional grouping of suburbs - where wide areas are lumped under one title. "Eastern suburbs", for example, includes Glendowie, Kohimarama, Meadowbank, Mission Bay, Orakei, Parnell, Remuera, St Heliers and St Johns - and there will be price-gain fluctuations within that category over the past 20 years.

Just as there will be in "Mt Albert", which covers Kingsland, Mt Albert, Owairaka, Sandringham and Waterview.

There are other issues, too. The institute's "City/Pt Chevalier" bracket includes some of Auckland's finest real estate in suburbs like Herne Bay, St Mary's Bay, Westmere
and Ponsonby - and all have made huge progress over the past two decades. But the median statistics for that area are weighed down by thousands of cheap inner-city apartments, which give a distorted result of actual overall performance.

Still, wandering back nearly 20 years - from January 1992 to June 30 this year - is an interesting exercise and shows the power of Auckland in residential real estate terms.

In that period, wider Auckland prices rose by 240 per cent (and would have shown a higher result than that if the more subdued Thames/Coromandel had not been included within that historical bracket).

Among the North Island provincial cities, only Napier enjoyed the same level of growth, although Taupo was knocking on the door. Hamilton was the best of the cities within range of Auckland, with prices up 213 per cent, just ahead of Whangarei.

But break out the best-performing Auckland groupings to see the real clout of the Queen City.

A little over $90,000 represented the median price over three months of sales in both Whangarei and Onehunga/ Penrose in January 1992. Today, as the Whangarei investment has grown to $285,000 (a rise of 212 per cent), the two Auckland suburbs have surged 331 per cent to a June 30, 2011, median of $416,250.

Down in places like Palmerston North and Wanganui, they must be scratching their heads. If there is someone around who was thinking of buying on Waiheke in 1992 and opted instead to spend $80,000 on houses in Wanganui, he or she may be feeling a little unwell reading the following paragraph.

To have kept pace with inflation, that Wanganui house would now need to fetch $252,000. But the institute's threemonth median price to June 30 suggests a price of around $165,000 is more likely. Up on Waiheke, meanwhile, that $80,000 will probably have grown well above $500,000.