This morning’s papers saw more hype and bluster in the Herald and on Stuff on housing bubbles and million dollar suburbs.
The most ridiculous of which was a piece by David Slack in the Sunday Star Times peppered with the catchy phrase ‘million dollar mortgages’. Great for generating clicks but like a lot of rhetoric in the piece not based on reality.
If you look at the actual data you’ll see that the median sale price in October was at an all-time high of $868,000 – a mere $132,000 short of the million dollar mark. The biggest real estate agency in Auckland, Barfoot and Thompson, posted their lowest October sales numbers in five years – according to managing director Peter Thompson this meant that a greater proportion of high end homes were sold in the month. So what was the impact of all this high end activity? An average sales price of $943,801 and a median of $865,000. Way up on the average of the previous three months of $894,000.
So if average Auckland property prices have never been close to the $1 million mark then where are these numbers coming from? Quotable Value’s house price index which would have you believe the average is $1.04m. QV is a state owned enterprise that exists to provide councils with data for rateable valuations. Over the last ten years they’ve partnered with Core Logic to provide an increasingly commercialised service selling valuations to banks and the public. The monthly releases of their House Price Index and their automated E-Valuations are treated by media and home owners as gospel, yet their own numbers show they’re out by more than 10% on one in every three properties.
No one is denying Auckland has issues with housing affordability but the misinformation coming out of the media hype machine is helping no one.