The latest figures from Statistics NZ shows that the most recent increases in housing prices eclipses minimum wage and the average salary. No surprises, but Auckland is the only region that housing growth was on a bigger incline that salaries. The median average salary in Auckland last year was $46,800 (up 2 per cent from the year before) while the average Auckland home made double this if based on a seven day week – $227.39 per day in capital gain compared with $128.11 in wages – This equates to a rise of $83,000 since March last year.
When comparing how rapidly these prices are rising we can compare it to the rate in which some New Zealand occupations salaries increase. A first year nurse makes just $47,000 rising to $64,000 after 5 years or en entry level Police constable earns a basic salary of $52,000 rising to $57,000 after 5 years – all of these less than the percentage rate in which the Auckland housing market continues to increase.
Referring to the Weekend Herald’s research (www.herald.co.nz) all of the countries 12 regions were looked at as well as the salaries in these regions but none had seen a rise like Auckland has. Other regions of interest were Taranaki and Bay of Plenty, who’s average house price had risen by more than $30,000 since March 2014. Auckland’s neighbor to the south didn’t fare as well with a $20,000 decrease to an average of $325,000 ($55 a day).
What is interesting is the percentage of increase within both the real estate sector and annual salaries, not just Auckland but as an average throughout Auckland. The national house price jumped 8 percent which equated to $35,000 whereas the national wage sits at $44,720 which only saw an increase of 3.1 percent. According to Careers NZ, last years house price growth is on par with the annual salary of a cleaner or assistant store manager and higher than a retail assistant or kitchen hand.
The future is looking rather bleak for first time home owners looking to invest in Auckland property. It has given existing buyers some new found wealth but some are worried than it has also locked an entire generation out of home ownership. Real Estate Institute CEO Colleen Milne assured people recently that this will change when housing development ramped up.. although it would probably be in the outer suburbs, so people should keep saving but be prepared to move outwards or commute.
What question we have at property.co.nz is that in 5 years time, what will be considered Auckland? This magnificent cities urban sprawl just keeps getting wider as it sees a record number of immigration and a shortage of properties. When real estate insiders talk about outer suburbs how far are they thinking? These are questions that first time home owners should be asking themselves.