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Auckland's property market: circa 2000 to 2010
In
this example, there are two new houses in a new subdivision 10 kilometres
out of Auckland Central. Let's imagine they are the GJ Gardner Design
# 358 - a nice 240 square meter family home costing (in those days) around $900 per m2,
or just over $200,000.
Add another $150,000 for a 600 m2 section, and
this house would sell for $350,000 "brand new".
Mr
Sadd purchased house #1 and the happy Gladd family house #2.
In
the next 12 months, the Gladds added "improvements" to their
happy family home.
They fenced the property, added a concrete driveway
and double car garage. They bought a portable spa pool and pergola for
it, and installed a Cascade "Jupiter" family sized pool.
They
spent a total of $100,000 - bringing their total investment to $450,000
- and settled down for a happy life.
In the meantime, Mr Sadd spent NOTHING! No fence, No grass, No driveway,
No Pool, - No NOTHING!
Ten years on, both the Gladds and Mr Sadd decided to sell and move. The Gladds
upwards, & Mr Sadd wanted to live in Morrinsville where houses are
cheaper!
Even assuming
that the Gladds' $100,000 capital expenditure was reduced in "added value"
to 50c on the dollar - or $50,000 - the following is the scenario most
likely to occur in the Auckland region, which has been experiencing an
average of 7.5% growth in capital value each year for the past three decades. (Many Valuers call us to ask what the pool & landscaping cost, and add THAT value to the house valuation
Actually, in the years 2007 - 2014 the Auckland rate was
more like 12% per annum, but
let's keep it simple
and assume the "110 year 7% Auckland average" annual increase
is to be applied here!
The left column shows the "Annual Capital Gain" figure, the next column
the "Current Market Value". Remember that some older people without children or grandchildren may
not want a house with a pool, some
young buyers would prefer a cheap "do-er-upper" like the Sadd
house so they could "improve it" and "add value".
A house with a pool is more likely to attract family buyers, like - well
... yourselves!
The
Gladd's house started at the "new" improved valuation of $400,000
(The original $350,000 + $50,000)
|
| Year |
#1:
Mr Sadd |
#2:
The Gladds |
| |
Annual Capital
Gain |
Current Market Value |
Annual Capital Gain |
Current Market Value |
| 2003 |
$26,250.00 |
$376,250.00 |
$30,000.00 |
$430,000.00 |
| 2004 |
$28,218.00 |
$404,468.00 |
$32,250.00 |
$462,250.00 |
| 2005 |
$30,335.00 |
$434,803.00 |
$34,668.00 |
$496,900.00 |
| 2006 |
$32,610.00 |
$476,414.00 |
$37,268.00 |
$534,187.00 |
| 2007 |
$35,056.00 |
$502,470.00 |
$40,064.00 |
$574,251.00 |
| 2008 |
$37,685.00 |
$540,155.00 |
$43,068.00 |
$617,320.00 |
| 2009 |
$40,511.00 |
$580,667.00 |
$46,299.00 |
$663,619.00 |
| 2010 |
$43,550.00 |
$624,210.00 |
$49,771.00 |
$713,391.00 |
| 2011 |
$46,816.00 |
$671,000.00 |
$53,504.00 |
$766,895.00 |
| 2012 |
$50,320.00 |
$721,360.00 |
$57,517.00 |
$824,412.00 |
Mr
Sadd's house should have technically doubled in value over Ten Years but the
run-down state of the place means it sold at auction for $670,800 - $50,000 less than the potential average!
|
A
capital gain of more than $420,000 - Plus the "Priceless" enjoyment of the "improvements", swimming pool etc. |
The
Gladds gained more than $150,000 MORE than Mr Sadd when they both sold similar houses after ten years! |
The
Gladd's house was well received by the Estate Agent as good stock, and quickly
sold for $845,000 to a family buyer. |
2022 update
|
7.0% Auckland average? NO WAY !
3.5% Bank loans?
It's a No-Brainer!
|
|
2012 |
721,360.00 |
50,495.00 |
...7.00% |
| 2013 |
771,855.20 |
54,029.85 |
...7.00% |
| 2014 |
825,885.06 |
57,811.94 |
7.00% |
| 2015 |
883,697.02 |
61,858.78 |
7.00% |
| 2016 |
945,555.57 |
66,188.89 |
7.00% |
| 2017 |
1,011,744.46 |
121,409.00 |
12.00% |
| 2018 |
1,228,352.70 |
171,969.38 |
14.00% |
| 2019 |
1,400,322.08 |
280,064.42 |
20.00% |
| 2020 |
1,689,386.50 |
369,685.00 |
22.00% |
2021 |
2,000,000.00 |
400,000.00 |
20.00% |
| 2022 |
2,400,000.00 |
480,000.00 |
20.00% |
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