Globalisation shakes up property
National home-ownership levels plunge from high as market turns on its head in huge two-decade change
It might be hard to believe, but 20 years ago you would typically pay less for an Auckland home than one in Wellington.
Queenstown pads were cheaper still.
Yet two decades of globalisation have given the property market an almighty shake-up, data from the latest OneRoof Property Report, released today, shows.
Queenstown has now skyrocketed into the country’s most expensive housing market, its prices riding an influx of Silicon Valley billionaires and Hollywood celebrities to leap almost 400 per cent in value.
Homes are now typically valued close to $1 million ($966,500), compared to $195,000 in 1999.
Auckland prices have also zoomed ahead of Wellington in a rise fuelled by new migrants and growth in international trade and jobs.
Super City values have surged 253 per cent, from $235,000 in 1999 to $830,500 now, while Wellington prices jumped from $236,500 to $750,000.
The country’s biggest riser, however, was remote Mackenzie district — gateway to Aoraki/Mt Cook — where homes were now five times more valuable than two decades ago.
OneRoof editor Owen Vaughan said globalisation had “fuelled one of the biggest 20-year changes in New Zealand property the country had ever seen”.
That has brought a great deal of wealth to those who bought Kiwi homes years ago.
But community groups worry house prices have become so expensive they threatened to cleave a fault line in society, separating the “haves” from the “have nots”.
National home-ownership levels have now plummeted from a record high of about 78 per cent in the 1980s to 55 per cent.
It’s a price pressure felt most keenly in Auckland.
In 1999, New Zealand had one of the most affordable developed-country housing markets, when the price difference between Auckland and the rest of the country was not so great, said analyst James Wilson, from OneRoof’s data partner Valocity.
House prices at that time were mostly driven by domestic concerns, such as Wellington values being propped up by an abundance of government-sector jobs, he said.
But increasing exposure to global markets led to greater trade and more businesses setting up head offices in Auckland.
It also brought more people to our shores to live. Most choose to stay in
Auckland as the largest economy and jobs market — a factor that compounded the city’s shortage of housing.
And Wilson didn’t foresee other housing markets — apart from Queenstown — catching up with Auckland anytime soon.
“I suspect we will continue to see the overwhelming majority of migrants land in Auckland in the coming years and that will unfortunately continue to push out of kilter the supply-demand imbalance,” he said.
Omaha — the northern beach getaway for the rich and famous — was the Auckland suburb to benefit most from the housing boom, with prices jumping 664 per cent in the past 20 years.
That’s a staggering $1.5m value, rising from $272,500 in 1999 to $1.8m, according to the OneRoof-Valocity data.
Homes in exclusive St Marys Bay rose by even more in dollar terms, climbing $1.6m from $640,000 in 1999 to $2,267,500 now.
Ponsonby home owners likewise have been sitting on goldmines with current $1.8m home values more than five times greater than the typical $319,700 value in 1999.
Wellington prices have also leaped dramatically, but values in nearby towns within commuting distance have jumped even more in percentage terms.
Porirua, Upper Hutt, the Kapiti Coast and Lower Hutt all ranked in the country’s top 10 biggest risers over the past two decades.
The South Island’s Mackenzie district — home to scenic Lake Pukaki and Lake Tekapo as well as within easy access of Aoraki/Mt Cook — was the country’s biggest percentage riser with home values jumping from $72,000 to $435,000 — a lift of more than 500 per cent.
But although homes had already leaped by five times their value, they were still comparatively cheap.
So does this mean the region is on its way to becoming the next Queenstown?
Valocity’s Wilson was not ready to commit just yet. Mackenzie had the same stunning scenery and adventure tourism that led to Queenstown’s growth but it still lacked an airport and other important infrastructure, he said.
“I’ll be intrigued to see what the next 20 years brings for it,” he said.