North Shore’s a sure thing

Auckland’s North Shore has a reputation as a cruisy place, with its pōhutukawa beaches and sparkling seas. It’s been an area with big houses and bigger backyards, with elite seaside suburbs such as Takapuna housing some of the country’s rich and famous.
Along with the rest of Auckland, North Shore has experienced phenomenal growth over the past few years. In the past 12 months, many North Shore suburbs have increased in value by upwards of 15%. Much of this growth has been driven by investors and developers looking to cash in on the demand for property in Auckland by utilising Unitary Plan changes that allow for intensification. Where one house on a 1,000m2 section used to be the norm, the plan changes now offer investors the chance to develop five or more smaller homes in its place.
“The change to mixed housing zone in many areas of the North Shore, plus the huge increases in capital gains, have been a big driver in the market,” says Dan Manford from Barfoot & Thompson Glenfield.
He says that investors are snapping up anything with development potential, and this is having a flow-on effect to the rest of the market.

City of sales

Sure, it’s a cliché, but North Shore exemplifies the hackneyed “city of sales” moniker. It’s booming, and the stats prove it. According to CoreLogic data, the top ten suburbs have experienced a price increase of between 10%-16% from February 2020 to 2021. And many of the suburbs leading the charge are those that have the best development potential.
Sunnynook leads the charge with a year-on-year increase of 16%, from $997,300 to $1,156,700. Hillcrest is close behind, up from $1,058,400 to $1,218,050, a rise of 15.1%. Beach Haven is up 13.7% from $912,000 to $1,037,100 and Glenfield is up 13.4%, from $898,600 to $934,350.
Manford says that Glenfield and surrounds are very “investor heavy” suburbs. But when he began as manager of the Glenfield branch of Barfoot & Thompson, the interest was far more muted.
“When I started working in Glenfield it was on the verge of the foreign buyer ban, there was talk of capital gains tax (CGT), and the anti-money laundering laws were coming in,” he says. “This resulted in a cooling of the market and affected the sales volume.”
But as interest rates dropped, the CGT didn’t eventuate, and the implications of the Unitary Plan changes started to sink in, the market began to buzz.
“We are seeing a lot of investors buying properties with large sections either as land banking or for development,” says Manford.

Houses in suburbs like Sunnynook and Wairau Park (in double Westlake zones) are particularly popular. These can attract good rents while investors wait and see what the land value does; or they can be developed in the knowledge that they will easily sell to buyers seeking good zoning.