Brought to you by the Valocity Research Team: Wayne Shum and James Wilson

Executive summary

The New Zealand housing market has enjoyed substantial growth since 2016, the growth accelerated after the first COVID-19 Lockdown in April 2020. As a result, many homeowners have enjoyed equity gain, which some have “unlocked” to purchase additional properties and other consumer spending.

As the property market may be beginning to encounter some headwinds, Valocity analysed how much equity purchasers had built up over the past five years to try and determine what areas may be more capable of withstanding any softening of property values.

Key research findings

  • As could be predicted. those who purchased their properties early have built up the most equity to withstand any potential price shock
  • Buyers on Waiheke Island have built up the most equity as measured by today’s value
  • Older suburbs performed better than newer suburbs; many of these homes have larger sections, increasing demand among a range of buyer types such as developers, further accelerating value growth
  • CBD and CBD fringe suburbs performed poorly; these suburbs are dominated by apartments and townhouses where capital growth was the lowest over the past five years

How much equity have Aucklanders built up?

Across Auckland, homeowners who purchased in 2016 have accumulated nearly half of their current value as equity, gained from the rapidly rising property market over the past five years. Those who bought in 2021 have also achieved 16% in equity due to the continued buoyant market in the first half of 2021. The average gain for purchasers who bought since 2016 was 38%, with the final amount depending on the purchase date, property type, and location.

The below graph highlights the average equity gain for homeowners who purchased in each year since 2016.

Which suburbs outperformed the market?

The best performing suburbs can be categorised into two groups; outlying suburbs and gentrifying suburbs.

Homeowners in outlying suburbs such as Waiheke Island, Leigh, and Waiatarua built up the most equity since 2016. Many of these suburbs were coming off a relatively affordable ‘base’ – which may also be a contributing factor in their equity growth.

The gentrifying suburbs of Point England and Henderson Valley have also shown significant equity growth. These suburbs are located close to public transport hubs, and they also have larger section sizes suitable for redevelopment.

Table 1: Top performing suburbs – Equity gained since 2016

Suburb

Equity Gained as Proportion of Today’s Value

Surfdale

60%

Waiheke Island

59%

Ostend

59%

Leigh

59%

Onetangi

57%

Omiha

57%

Waiatarua

56%

Point England

55%

Henderson Valley

53%

Oneroa

53%

Which suburbs underperformed the market?

Some of the poorest performing suburbs were Auckland Central and CBD fringe suburbs. Apartments and terraced houses dominate these suburbs. Since 2016, the key driver to Auckland value increase was section size and development potential. These homes with little or no exclusive land area did not enjoy the same level of equity gain as the rest of Auckland. There have also been other drivers which have had negative impacts on demand within some of these submarkets, such as the impact of a devasted international student market on demand for inner CBD apartment stock.

Suburbs such as Coatesville, South Head, and Waitoki are rural settlements, and whilst these properties tended to have large landholdings, there is no development potential in these areas. Therefore, they did not enjoy the same equity gains achieved across the rest of Auckland.

Table 2: Top performing suburbs – Equity gained since 2016

Suburb

Equity Gained as Proportion of Today’s Value

Auckland Central

17%

Coatesville

22%

Newmarket

22%

South Head

23%

Grafton

23%

Eden Terrace

24%

Long Bay

25%

Waitoki

26%

Manukau

26%

Fairview Heights

26%

Which suburbs are most vulnerable to a price shock?

Equity growth alone does not always paint the full picture, it is important to understand when buyers have entered a market and what the movement has been since then to begin to consider how ‘exposed’ an area may be to a market softening.

To measure which suburbs would be the most vulnerable to a price shock, we have investigated the amount of gain and when these properties were purchased. As the market has risen since 2016, as already identified above, those who bought earlier had more equity to withstand a shock.

We have created an “At-Risk Index” to determine which suburbs are the most vulnerable. The two major factors affecting the ability to withstand a price shock are the proportion of the suburb purchased recently, therefore lacking the time required to build up substantial equity. The other factor is the price growth during the same period; the greater the price growth, the better the homeowners in the suburb can withstand a price shock. The suburbs deemed the highest risk are those where the highest proportion of the market purchased recently, with low value growth since this time.

Table 3: Suburbs most at risk

Suburb

Number of Homes

Proportion of Suburb Sold in 2021

Number of settled Sales in 2021

Equity Gained in 2021

At-Risk Score

Maraetai

          1,019

2.5%

25

57.8%

4.36

Glenbrook

             907

2.8%

25

28.8%

2.09

Avondale

          7,192

1.8%

127

23.9%

1.97

Surfdale

          1,001

2.7%

27

26.5%

1.93

Parnell

          4,134

1.7%

71

22.2%

1.84

Somerville

          1,473

1.7%

25

22.1%

1.84

Birkenhead

          3,899

2.3%

91

23.3%

1.78

East Tamaki

          3,988

1.5%

61

20.3%

1.72

Devonport

          2,760

1.6%

45

20.4%

1.71

Westmere

          1,745

1.5%

26

19.9%

1.69

Analysing the above results, we see that the suburbs least prepared to withstand a price shock are those with recent large-scale developments. These all had a high proportion of sales and relatively low equity gains made in 2021. These suburbs also have many new developments proposed or underway, so oversupply will further dampen any future price growth.

Table 4: Suburbs least at risk

Suburb

Number of Homes

Proportion of Suburb Sold in 2021

Number of Sales in 2021

Equity Gained in 2021

At Risk Score

Albany Heights

             978

6.0%

59

12.4%

0.49

Silverdale

          3,426

3.1%

106

8.1%

0.56

Long Bay

          1,265

5.7%

72

13.4%

0.58

Hobsonville

          5,330

4.3%

228

10.4%

0.59

Takanini

          4,876

4.0%

196

10.9%

0.65

Kumeu

          2,605

3.1%

80

9.8%

0.68

Huapai

             956

3.9%

37

11.5%

0.70

Wainui

          1,290

2.2%

28

9.1%

0.71

Flat Bush

        11,095

3.4%

378

10.9%

0.72

Papakura

          9,690

4.6%

450

13.9%

0.74

Realised gains

As a result of the significant value growth since 2016, some homeowners have realised the gain in equity and sold their property in these locations. This is particularly evident in some suburbs where they had experienced strong gains, and “flipping” activities are more evident.

Table 5: Suburbs with highest realised gains

Suburb

Number of Homes

Number of Sales since 2016

Number of Properties resold since 2016

Percentage sales resold

Clendon Park

    13,458

552

75

14%

Mangere East

    32,142

1021

97

10%

Mangere

    31,152

859

73

8%

Otara

    25,320

466

42

9%

Randwick Park

      8,550

477

35

7%

Clover Park

    13,716

410

31

8%

Manurewa

    54,192

2707

198

7%

Weymouth

    16,584

832

61

7%

Auckland Central

  167,478

6005

374

6%

Eden Terrace

    13,116

698

35

5%

 

Appendix 

Individual Suburb Performance

Table 6: Equity gained per suburb

Average gain as today’s value Purchase Year
Suburb 2016 2017 2018 2019 2020 2021 Total
Surfdale 81% 61% 59% 64% 52% 26% 60%
Waiheke Island 73% 55% 51% 69% 58% 13% 59%
Ostend 73% 60% 56% 59% 55% 31% 59%
Leigh 81% 58% 55% 57% 46% 31% 59%
Onetangi 81% 58% 54% 54% 48% 21% 57%
Omiha 71% 60% 68% 60% 46% 20% 57%
Waiatarua 73% 55% 64% 64% 40% 22% 56%
Point England 67% 49% 57% 72% 37% 15% 55%
Henderson Valley 64% 52% 55% 68% 45% 21% 53%
Oneroa 69% 60% 47% 55% 46% 20% 53%
Oratia 63% 60% 59% 51% 40% 16% 53%
Omaha 82% 56% 52% 43% 28% 11% 52%
Huia 56% 52% 48% 56% 53% 0% 52%
Westmere 68% 56% 52% 63% 36% 20% 52%
Palm Beach 63% 77% 40% 38% 40% 19% 51%
Shelly Beach 75% 58% 33% 52% 38% 17% 50%
Green Bay 64% 53% 52% 57% 38% 18% 50%
Piha 64% 50% 39% 58% 46% 27% 49%
Great Barrier Island (Aotea Island) 71% 60% 40% 36% 20% 36% 49%
Manukau Heads 65% 39% 46% 41% 51% 32% 49%
New Windsor 58% 58% 58% 53% 37% 16% 49%
Point Chevalier 63% 52% 53% 56% 34% 16% 49%
Otara 60% 56% 58% 55% 36% 12% 48%
Wesley 52% 63% 55% 56% 36% 26% 48%
Ponsonby 66% 53% 50% 57% 35% 15% 48%
Somerville 58% 52% 53% 55% 33% 22% 48%
Maraetai 45% 57% 55% 49% 38% 58% 48%
Red Hill 58% 52% 51% 59% 33% 17% 48%
Burswood 56% 49% 55% 53% 40% 11% 48%
Clendon Park 59% 54% 54% 52% 35% 13% 48%
Point Wells 73% 55% 43% 45% 31% 20% 47%
Glendowie 60% 53% 48% 56% 34% 14% 47%
Snells Beach 60% 53% 50% 50% 37% 18% 47%
Wattle Downs 59% 53% 55% 52% 36% 12% 47%
Glen Innes 64% 52% 52% 48% 36% 16% 47%
Ararimu 54% 46% 42% 56% 37% 16% 47%
Hunua 71% 51% 42% 60% 34% 13% 46%
Ellerslie 59% 53% 50% 50% 31% 17% 46%
Wellsford 68% 47% 49% 43% 28% 14% 46%
Manurewa East 62% 58% 59% 53% 31% 16% 46%
Waitakere 50% 56% 50% 58% 32% 18% 46%
Titirangi 56% 51% 49% 53% 36% 18% 46%
Farm Cove 45% 49% 52% 61% 41% 16% 46%
Patumahoe 56% 51% 48% 45% 35% 16% 46%
Bombay 55% 48% 44% 44% 39% 33% 45%
Mangere East 60% 52% 50% 48% 35% 16% 45%
Pahurehure 55% 50% 50% 51% 35% 18% 45%
Botany Downs 52% 55% 53% 53% 34% 18% 45%
Conifer Grove 54% 52% 51% 49% 35% 12% 45%
Beach Haven 57% 50% 48% 49% 34% 18% 45%
Algies Bay 65% 52% 37% 42% 36% 14% 45%
Meadowbank 58% 50% 45% 44% 36% 15% 45%
Weymouth 57% 47% 47% 48% 34% 14% 45%
Clover Park 57% 51% 51% 50% 34% 15% 45%
Kelston 50% 50% 47% 50% 36% 21% 45%
Hatfields Beach 52% 47% 37% 49% 41% 15% 44%
Te Atatu Peninsula 57% 51% 51% 52% 33% 19% 44%
Opaheke 53% 49% 51% 51% 34% 15% 44%
Sandringham 52% 50% 50% 49% 31% 20% 44%
Pakuranga Heights 51% 49% 51% 56% 34% 17% 44%
Kaipara Flats 59% 46% 44% 38% 40% 12% 44%
Randwick Park 57% 52% 47% 49% 34% 14% 44%
Shelly Park 48% 42% 48% 57% 34% 20% 43%
Avondale 52% 47% 47% 46% 35% 24% 43%
Glenbrook 64% 47% 40% 47% 39% 29% 43%
Kingsland 48% 55% 58% 46% 30% 15% 43%
Matakana 56% 47% 46% 43% 38% 15% 43%
Bucklands Beach 52% 48% 49% 50% 32% 18% 43%
Manurewa 56% 50% 47% 47% 34% 14% 43%
Hauraki 49% 46% 44% 49% 36% 20% 43%
Narrow Neck 50% 46% 50% 49% 32% 16% 43%
Golflands 49% 49% 48% 47% 35% 18% 43%
Muriwai 51% 43% 42% 47% 40% 20% 43%
Kohimarama 52% 43% 47% 50% 34% 18% 43%
Birkdale 55% 48% 46% 45% 32% 17% 43%
One Tree Hill 48% 49% 49% 52% 33% 13% 43%
Sunnyhills 49% 51% 45% 49% 32% 14% 43%
Warkworth 58% 48% 44% 42% 37% 15% 43%
Mount Albert 56% 47% 42% 48% 33% 15% 43%
Mangere Bridge 54% 50% 48% 46% 31% 16% 42%
Bayswater 52% 48% 42% 54% 30% 25% 42%
Panmure 53% 53% 50% 45% 32% 13% 42%
East Tamaki Heights 49% 47% 49% 44% 35% 16% 42%
Chatswood 49% 43% 48% 49% 36% 21% 42%
Army Bay 61% 42% 50% 43% 31% 12% 42%
Otahuhu 50% 48% 46% 47% 32% 18% 42%
Saint Johns 51% 46% 50% 52% 31% 18% 42%
Clarks Beach 57% 43% 43% 44% 32% 17% 42%
Remuera 49% 44% 45% 47% 33% 20% 42%
Mangere 59% 47% 45% 40% 28% 16% 42%
Massey 52% 49% 46% 45% 33% 16% 42%
Howick 50% 49% 46% 49% 34% 17% 42%
Mount Wellington 50% 49% 47% 44% 32% 19% 42%
Half Moon Bay 49% 50% 48% 46% 31% 15% 41%
Glendene 51% 46% 48% 47% 33% 15% 41%
Rosehill 49% 46% 45% 49% 30% 14% 41%
Saint Marys Bay 52% 49% 40% 41% 30% 16% 41%
Herald Island 60% 38% 70% 38% 34% 12% 41%
Cockle Bay 48% 44% 44% 42% 36% 15% 41%
Ranui 51% 47% 45% 47% 30% 12% 41%
Goodwood Heights 50% 45% 41% 48% 33% 20% 41%
Birkenhead 49% 44% 48% 43% 30% 23% 41%
Paremoremo 51% 49% 36% 50% 33% 30% 41%
Clevedon 54% 41% 41% 54% 31% 17% 41%
Grey Lynn 48% 43% 44% 44% 34% 18% 41%
Onehunga 50% 44% 46% 49% 28% 15% 41%
Henderson 49% 47% 46% 45% 32% 15% 41%
Royal Oak 43% 44% 47% 47% 33% 18% 41%
Morningside 51% 43% 42% 46% 30% 14% 41%
Stanley Point 48% 40% 46% 50% 32% 17% 40%
Northpark 44% 44% 48% 48% 30% 17% 40%
Devonport 52% 41% 42% 45% 31% 20% 40%
Greenlane 43% 47% 49% 45% 30% 17% 40%
Herne Bay 53% 42% 41% 42% 33% 16% 40%
Sunnyvale 48% 48% 44% 43% 32% 15% 40%
Bayview 46% 47% 44% 44% 32% 18% 40%
St Heliers 49% 40% 41% 44% 31% 19% 40%
Glen Eden 48% 44% 47% 42% 30% 15% 40%
Mount Roskill 48% 42% 43% 47% 32% 16% 40%
Forrest Hill 45% 41% 46% 48% 32% 15% 40%
Taupaki 47% 45% 35% 47% 37% 16% 40%
Wai O Taiki Bay 55% 47% 39% 44% 34% 10% 40%
Mount Eden 48% 42% 44% 44% 30% 17% 40%
Hillpark 49% 46% 43% 45% 30% 16% 39%
West Harbour 46% 40% 45% 46% 34% 16% 39%
Glenfield 46% 43% 43% 45% 32% 17% 39%
Sunnynook 44% 38% 47% 52% 30% 17% 39%
Riverhead 53% 40% 42% 42% 30% 14% 39%
Orere Point 52% 42% 37% 30% 26% 23% 39%
Blockhouse Bay 46% 47% 45% 45% 31% 13% 39%
Northcote Point 49% 44% 41% 41% 26% 20% 39%
Stillwater 46% 46% 37% 47% 32% 18% 39%
Drury 50% 29% 41% 44% 33% 16% 39%
Freemans Bay 47% 40% 34% 39% 32% 19% 39%
Waterview 56% 49% 46% 39% 26% 17% 38%
Red Beach 45% 42% 40% 43% 31% 17% 38%
Grand Total 47% 42% 42% 43% 30% 16% 38%
Pukekohe 49% 43% 41% 41% 30% 14% 38%
Pakuranga 44% 47% 42% 47% 31% 14% 38%
Stonefields 50% 40% 41% 33% 29% 10% 38%
Tindalls Beach 50% 40% 37% 45% 29% 16% 38%
Hillcrest 44% 40% 44% 45% 29% 17% 38%
Parakai 55% 38% 38% 37% 21% 12% 38%
Northcote 41% 42% 40% 45% 30% 18% 38%
Belmont 48% 38% 39% 43% 31% 16% 38%
Orewa 50% 43% 41% 41% 28% 14% 38%
Te Atatu South 42% 42% 43% 42% 33% 14% 37%
Papakura 50% 45% 43% 41% 28% 14% 37%
Eastern Beach 36% 40% 30% 49% 33% 15% 37%
Huapai 44% 38% 40% 45% 31% 11% 37%
East Tamaki 48% 41% 41% 38% 27% 20% 37%
Laingholm 43% 37% 38% 40% 28% 20% 37%
Mellons Bay 44% 40% 44% 39% 28% 19% 37%
Ramarama 46% 49% 40% 45% 28% 16% 37%
Kawakawa Bay 40% 38% 44% 39% 28% 10% 37%
Highland Park 40% 42% 46% 47% 28% 14% 37%
Totara Vale 42% 41% 41% 44% 28% 14% 37%
Dannemora 45% 39% 40% 46% 28% 13% 37%
Waiuku 48% 40% 38% 36% 29% 12% 36%
The Gardens 41% 40% 40% 42% 29% 15% 36%
Paerata 48% 55% 40% 33% 26% 12% 36%
Pollok 53% 31% 35% 29% 30% 22% 36%
New Lynn 41% 41% 43% 44% 27% 17% 36%
Mission Bay 47% 30% 40% 40% 32% 20% 36%
Hillsborough 40% 37% 44% 41% 26% 18% 36%
Lucas Heights 42% 42% 33% 36% 31% 15% 36%
Lynfield 45% 42% 43% 42% 28% 19% 36%
Manly 43% 41% 40% 40% 28% 15% 36%
Matakatia 40% 40% 45% 44% 31% 13% 36%
Shamrock Park 40% 27% 44% 43% 31% 14% 36%
Stanmore Bay 46% 38% 37% 40% 28% 13% 36%
Mauku 33% 30% 50% 37% 30% 31% 35%
Swanson 49% 41% 39% 39% 28% 12% 35%
Whenuapai 49% 39% 39% 40% 33% 12% 35%
Papatoetoe 45% 38% 40% 39% 27% 14% 35%
Karaka 46% 39% 38% 37% 29% 12% 35%
Arkles Bay 40% 30% 38% 38% 30% 16% 35%
Makarau 49% 45% 36% 28% 26% 16% 35%
Kingseat 38% 41% 39% 34% 29% 13% 34%
Helensville 47% 37% 36% 38% 27% 13% 34%
Milford 40% 38% 37% 39% 27% 17% 34%
Totara Heights 45% 46% 30% 33% 27% 16% 34%
Waiake 34% 36% 32% 39% 34% 25% 34%
Waiau Pa 47% 34% 30% 36% 24%   34%
Beachlands 44% 34% 38% 38% 27% 14% 34%
Epsom 38% 34% 40% 39% 27% 16% 34%
Takapuna 42% 35% 37% 36% 26% 17% 34%
Waimauku 39% 32% 41% 38% 30% 15% 34%
Greenhithe 41% 33% 34% 38% 27% 15% 33%
Parnell 40% 34% 37% 36% 26% 22% 33%
Browns Bay 39% 35% 36% 39% 29% 15% 33%
Torbay 35% 37% 36% 39% 29% 14% 33%
Kumeu 38% 32% 38% 42% 30% 10% 33%
Rothesay Bay 35% 38% 39% 35% 27% 8% 33%
Orakei 43% 34% 36% 34% 23% 18% 32%
Campbells Bay 36% 33% 35% 44% 28% 15% 32%
Awhitu 50% 32% 39% 32% 26% 10% 32%
Whitford 33% 38% 38% 36% 25% 19% 32%
Takanini 42% 39% 36% 33% 27% 11% 32%
Puhoi 37% 27% 28% 40% 31% 14% 31%
Westgate 53% 46% 40% 32% 27% 16% 31%
Gulf Harbour 41% 34% 31% 32% 24% 11% 31%
Castor Bay 35% 32% 28% 39% 25% 17% 31%
Murrays Bay 37% 31% 33% 37% 27% 14% 31%
Northcross 33% 32% 34% 41% 26% 15% 31%
Pinehill 34% 36% 36% 34% 26% 13% 31%
Hobsonville 39% 34% 35% 34% 26% 10% 31%
Windsor Park 35% 27% 31% 40% 25% 12% 30%
Dairy Flat 39% 29% 31% 29% 26% 20% 30%
Oteha 39% 32% 28% 35% 25% 13% 30%
Mairangi Bay 32% 29% 32% 36% 27% 16% 30%
Rosedale 29% 36% 27% 40% 25% 15% 30%
Unsworth Heights 35% 28% 31% 36% 26% 13% 30%
Favona 40% 34% 32% 29% 18% 11% 29%
Kaukapakapa 43% 29% 31% 28% 24% 14% 29%
Three Kings 37% 30% 28% 30% 20% 22% 29%
Schnapper Rock 29% 30% 33% 36% 26% 12% 29%
Albany 37% 29% 29% 32% 22% 16% 29%
Flat Bush 35% 32% 31% 33% 23% 11% 28%
Silverdale 34% 28% 30% 33% 22% 8% 28%
Wiri 47% 30% 24% 26% 25% 15% 28%
Albany Heights 31% 33% 28% 30% 27% 12% 27%
Huntington Park 41% 41% 24% 23% 19% 7% 27%
Wainui 30% 18% 16% 36% 29% 9% 27%
Fairview Heights 28% 29% 28% 34% 23% 13% 26%
Manukau 38% 30% 29% 27% 21% 14% 26%
Waitoki 26% 25% 30% 29% 25% 14% 26%
Long Bay 30% 26% 28% 34% 25% 13% 25%
Eden Terrace 33% 27% 22% 23% 18% 12% 24%
Grafton 26% 19% 27% 24% 17% 19% 23%
South Head 29% 28% 20% 17% 18% 13% 23%
Newmarket 26% 22% 25% 25% 19% 17% 22%
Coatesville 24% 21% 18% 22% 19% 18% 22%
Auckland Central 20% 14% 16% 17% 14% 17% 17%