The suburbs 2003

CHARLOTTE COSSAR reviews what has been a far-from-dull 12 months in the world of real estate.

With the frenzied real estate market performing like it has, from week to week it was hard to keep up with the changing house prices that were experienced in many areas. And, although some areas have slowed, the market looks set to continue to be buoyant into 2004.

In sought-after, inner-city suburbs there are many stories of houses selling for more than $100,000 than the year before, and according to Quotable Value New Zealand these tales may have some merit.

For the year ending June 2003, Auckland house prices rose 19.9%, North Shore city 15.5%, Waitakere city 10.3%, Manukau city 12% and Papakura 10.7%.

Influenced by many factors, including the return of expat New Zealanders, a net rise in immigration and a reasonably stable economy, the whole of Auckland has been affected by this frenzy, especially inner-city suburbs.

Influenced mainly by transportation issues, it is not hard to understand. Having recently moved into the inner city from a semi-rural property in Swanson, our travelling time has reduced by three hours a day.

However, as supply has decreased the surrounding suburbs have also been targets, especially those on rail routes, for example, Mt Albert and Meadowbank, with the ripple affect also hitting Panmure and Glen Innes.

According to Bayleys research, the median price for 2003 for homes in the eastern suburbs - which includes Glendowie, Kohimarama, Meadowbank, Mission Bay, Orakei, Parnell, Remuera, St Heliers, St Johns and St Johns Park - was $550,000, an increase from $490,000 of 12.2% from 2002.

However, in the suburbs surrounding Pt Chevalier, including Coxs Bay and Freemans Bay, Grafton, Grey Lynn, Ponsonby, Newton and Morningside, the percentage increase was even more impressive at 30.5%, with the median house price for 2003 being $502,450, rising from $385,000 in 2002.

Examples of these increases are two sales by Karen Spires of Bayleys. Spires sold a three-bedroom renovated home in Green St, St Marys Bay, purchased in January 2003 for $790,000, for $925,000 in November. And a beautifully renovated three-bedroom, two-bathroom home with sea views in Melford St, St Marys Bay, was purchased in April 2003 for $1.1 million and sold in September for $1.3 million.

These figures give an indication of why all year people have been obsessed with the real estate market.

And this has also had an impact on the rental and investment property market with a big increase in demand for houses. Fuelled by short-term migration, especially language students, the increase of terrace and apartment complexes has been staggering. It is predicted that the number of inner-city apartments will double in the near future from 4000 units, with at least 7000 units planned to be built.

Although the number of students has dropped during the year, due to the SARS epidemic and uncertainty over government policy, demand for city dwellings is still strong.

You only need to look through the property pages to grasp the amount of apartments for sale. And, in some of these complexes, the number of homes available exceeds 500.

So what are people looking for? It would seem that people want a variety of housing from small 20sq m apartments to 2ha lifestyle blocks on the city's rim. No one area of the market has been untouched.

And with the view to the future being high-density housing - with Mt Wellington, Newmarket, Glen Innes, Panmure, Otahuhu and Avondale being earmarked by Auckland City Council as poles for growth - who knows when things will slow down.