27 Sep 2021

Homeowners gain 'paper wealth' at expense of non-owners, would-be first home owners

6:59 pm on 27 September 2021

All major centres in the country have seen house prices gain, with median values in some suburbs increasing by close to $600,000 in the year ending August.

Houses around Lyttelton area in Christchurch

Photo: RNZ / Nate McKinnon

Data from CoreLogic shows 771 of the country's 983 suburbs saw median value increases of $100,000 or more, and only 24 saw increases of less than $50,000.

Herne Bay in Auckland retained its position as New Zealand's highest priced suburb with a median value of $3.25 million.

Ponsonby saw the biggest jump in median value, with a gain of $597,550.

CoreLogic chief property economist Kelvin Davidson said the growth in values resulted in many owners earning more on paper from simply having a property than going to work every day.

"Needless to say, this is paper wealth effectively coming at the expense of non-owners and unfortunately for would-be first home buyers our latest data refresh highlights yet again the challenges they face," he said.

Kelvin Davidson


In Auckland, only 37 suburbs out of a total of 208 have a median value less than $1m and only 10 have a median of less than $800,000.

Across the entire country, only 150 suburbs have a median value less than $500,000 (61 in the North Island, 89 in the South), almost half the number of 12 months ago.

In Hamilton, all suburbs achieved a median value increase of at least 14 percent. The city had four $1m-plus suburbs, with Harrowfield topping the list as its median value hit $1,068,500 at the end of August 2021. Bader was Hamilton's cheapest suburb at $580,550.

In Tauranga the number of $1m-plus suburbs has increased from three in June to eight by the end of August, with Mount Maunganui achieving the highest median at $1.33m.

Seatoun was Wellington's priciest suburb with a median value of $1.93m, Davidson said.

"As affordability declines we've also seen cheaper suburbs in Christchurch and Dunedin increase in value as buyers, particularly first home buyers who have been active this year despite the popular view that almost none have been buying, get into the market in less centrally-located suburbs."

Dunedin's first $1m-plus suburbs were Māori Hill and East Taieri, where median values increased to just over the million mark.

Davidson said there were only three suburbs in Dunedin with median values below $500,000.

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