What can you buy for half a million dollars?

Half a million dollars doesn’t buy you much in the way of property on the Hibiscus Coast any more, as the price of land skyrockets.With housing affordability a major issue in the Auckland region, Hibiscus Matters took a look at what you can get for $500,000 locally – while bearing in mind that for Auckland Council at least, just over $600,000 is currently considered “affordable” (see box). However, with a 20 percent deposit needed, we felt that $500,000 or under was a more realistic benchmark – this requires first home buyers to somehow find $100,000 as a deposit.

Bayleys figures show that the median sale price on the Hibiscus Coast was $800,000 in April, so it seemed plausible to find something in the $500,000 range. Yet mentioning this figure caused barely suppressed laughter from local real estate agents – some said they had no residential listings at or below $500,000, and hadn’t seen anything in that price range for eight months on the Coast.

In new subdivisions such as Millwater, you’d be lucky to find a house and land package for under $600,000. At Hobbs Wharf you can currently buy a section for $395,000–$439,000, then build a house.

Land value means that old or even derelict baches on sites in more established areas such as Stanmore Bay, Manly, Red Beach or Orewa are selling for $550,000 and up. And agents say any properties listed in the low $500,000s attract many offers and sell for much higher figures.

Houses and apartments without a code of compliance can be found in the $500,000 range, because of the major work needed to bring them up to standard (this includes leaky homes).

It appears that first home buyers who would like to live on the Coast may have to wait until local Special Housing Areas (SHAs) are completed.

SHAs that will come on stream in a few years (they have to apply for resource consents by September 16 or lose their special status) must have a percentage of “affordable” dwellings (see box).

In Whangaparaoa the development at 20 Link Crescent in Stanmore Bay will comprise 60 new homes and prices will start from $550,000. Cabra Developments’ site by Karepiro Drive will provide approximately 100 new homes, with the affordable component expected to be priced between $500,000 and $550,000. This development is well underway with a projected completion date of early 2019.

In Wainui East, Fulton Hogan will develop around 2000 new dwellings in its SHA, and there is also a small SHA in the Highgate development in Wainui Rd (north Silverdale). In Orewa there are SHAs in West Hoe Heights and George Lowe Place.

What’s affordable?

• For Special Housing Area purposes, Auckland Council calculates that a property is ‘affordable’ if it is sold for no more than 75 percent of the region’s median house price. The Real Estate Institute of NZ’s (REINZ) most recent figures put the Auckland median at $805,000, which would make Council’s affordable figure $603,750.

• Last month REINZ noted that New Zealand’s national median house price had reached a record high of $506,000 (based on data gathered in May).

• There are three ways that developers can meet Council’s affordability criteria in their Special Housing Areas – either 10 percent of the development must be “relatively affordable” (sold for no more than 75 percent of the Auckland region median house price) or five percent must be “retained affordable” (sold at a price where monthly mortgage payments do not exceed 30 percent of the Auckland median household income) – or a combination of those two.