What Aucklanders value in property
Friday 6 September 2019
Properties with more permissive zoning have clearly higher values, according to new research from Auckland Council’s Chief Economist’s Unit.
By The Landlord
The research looks at what Aucklanders’ value when it comes to property and it unearths the three things people most value as reflected in house prices.
Chief Economist Unit senior economist, Shane Martin, says the findings, which are based on two years of new sales data, identify what Aucklanders value and quantify how much these factors affect house values.
“We're privileged to live in a city that already has lots of green space, so when it comes to buying a house, we don’t see a premium for this. Suburbs we think of as wealthy, are wealthy for reasons other than their big beautiful trees.
“What really stands out as desirable and valuable for Aucklanders is the ability to develop their property and being able to commute easily to work.
“Of course, we all know these affect property prices, but this new data and research now shows us exactly how much.”
The research provides clear evidence that people value properties that have development options – and that size matters when it comes to development opportunity and adding value.
Property which is zoned for Terrace Housing and Apartment Building zoning allows for the greatest height and scale of development of all the residential zones and the most development opportunity.
At 1200 m2, this has a massive premium (double) above and beyond Single House zoned land, the research shows.
Also, at any section size, sales of houses that are in business zones have the largest land premium. These have maximum flexibility and can be used for both housing or business activities.
Another finding is that Aucklanders value living near jobs and are willing to pay to live near the city centre.
Almost 25% of Auckland’s jobs located within Auckland’s city centre and inner-ring suburbs, the 0.1% land area packs a punch and is an economic and employment powerhouse for the region.
According to Martin, research shows that for every 1% increase in jobs in a suburb, house prices go up by nearly 0.03%.
“In neighbourhoods near the city centre, the premium can be as high as 25% or more, demonstrating the importance and value Aucklanders place on living close to where they work.”
But perhaps the most surprising discovery is that tree canopy in a suburb does not affect house prices.
That’s because more modestly priced areas, like Ranui, Glen Eden and Sunnyvale, have the same tree canopy as wealthy “leafy-green” suburbs like Remuera, Parnell, and Herne Bay
Auckland has a plentiful supply of tree-lined streets, green spaces and parks and, as a result, property values do not attract a premium for this, Martin says.
Rather the “leafy-green” suburbs command higher house prices because of the additional amenities they offer.
“Specifically, close proximity to jobs and desirable schools; especially the double-grammar zone which adds a house premium of around 13%.”
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