Does your house earn more than you?
Herne Bay houses make in days what average Aucklander does in year
A typical Auckland worker would need to toil away for almost 20 years to earn as much money as homes in Herne Bay made in the past year.
The median sales price in the exclusive coastal suburb jumped $940,000 to $2.5 million in the 12 months to June 2018, according to Weekend Herald analysis of Real Estate Institute of NZ data.
Based on those figures, a house in Herne Bay would take just 21 days to make what the average Aucklander would earn in a year, $53,872.
Yet Herne Bay was an outlier in an otherwise flat Auckland market, with most suburbs in the city seeing drops in median¯sale price. The losses were worst in Ora¯kei where median sale prices fell by $720,000 to $1.31m and Freemans Bay, where values fell by $421,250.
The median sale price for Auckland as a whole fell $5000 in the 12 months to June to $850,000.
By contrast the median sales price for Wellington and Gisborne rose $70,000 — more than workers in each region earned in the same period. A standard Wellington home earned $42 more a day than a Wellington worker, while Gisborne homes made $61 more per day than workers there.
The Weekend Herald crunched the numbers by analysing REINZ median house price data and the latest Stats NZ income figures.
In recent years, house prices — particularly in Auckland — rose so fast that capital gains often totalled far more than the average worker’s pay. But the new figures showed this trend had slowed as the typical worker across the country made $50,908 in the 12 months to June. This was about $20,000 more than the typical Kiwi home made, with the national median sale price hitting $560,000, up
5.7 per cent on June 2017. However, in four of the country’s
12 districts, homes still made more than local workers in the past year.
In addition to Wellington and Gisborne, this included Waikato, where homes gained $60,000 in value — or just over $10,000 more than the local worker’s typical salary.
Hawke’s Bay homes gained $56,000 in value, just over $8000 more than median wage in the city.
Homes in Greytown, Wairarapa, rose $325,000 to a median $820,000 median — meaning home owners had capital gains worth almost 15 times the yearly salary of a local worker.
Elsewhere, however, house price gains were more moderate.
REINZ chief executive Bindi Norwell said regional prices continued to edge up “as demand for good housing stock continues to exceed the supply of houses”.
As well, Aucklanders were still moving to the regions where they could get more for their money.
Unless the lack of supply was addressed, regional house prices were likely to “continue to increase in the short to medium term”. She also said that while most Auckland suburbs lost value, there were still big winners alongside Herne Bay home owners.
In Morningside, houses gained $396,000 in the 12 months to June to hit a median sale price of $1.035m and Oteha had a $313,000 jump in values to a median price of $1.125m.
Demand for good housing stock continues to exceed the supply. Bindi Norwell, REINZ
OneRoof and CoreLogic data showed Auckland’s St Marys Bay had been the biggest winner since 2008. In the last 10 years, houses there earned $1.128m, while the average Kiwi worker made $486,604. It would take that worker 28 years to earn what St Marys Bay did in 10.
However, OneRoof editor Owen Vaughan warned that in Auckland’s flat market, high-value suburbs such as Herne Bay could easily see a flip between profit and loss as a result of even small changes in the market.
“For every Herne Bay or Saint Marys Bay that’s enjoying huge gains, there’s another that’s suffered big losses. Herne Bay is a case in point. Last June, its median sale price was $1,560,000, which could have been the result of a slow quarter or more sales of lower value properties in the suburb,” he said.
“Of bigger significance are the huge gains seen in lower-value housing markets in the regions. Gisborne suburbs that earned more than the average worker will have seen more demand and market activity than Herne Bay, because the lift in median sales prices there will have come off a much lower base.”