First home buyers continue to look to Waitakere City as they seek a more affordable house to buy – places like Massey, Swanson, Henderson, Glen Eden.

While affordability is often better out West it can also provide an opportunity to get some capital gain if you’re open to what’s going on around out there . That’s true for other locations as well.

While property values are increasing anyway as a result of a shortage in housing supply location specific factors still play a part. And they’ll continue to be important factors once the supply problem is overcome. In central Auckland and the so called city fringe values are driven by proximity to the conveniences of the city itself, proximity to work, established neighbourhoods and good schooling among other things.

On the outskirts of a city those things still apply but other factors can be more important. Keep an eye out for improved transport links to make it easy to get around generally and into the city itself as well as changes to land use to allow more residential or commercial development. Capital gain has a reasonable chance of happening when these two things come together.

There are two great examples of this happening right now in West Auckland.

Westgate

It’s hard to miss the heavy machinery pushing dirt around just north of Westgate to form a new commercial hub. It has the benefit of new motorway links to the north and east and a new ferry service from Hobsonville. That brings new work opportunities locally as well as making it easier to get to work on the Shore if you wanted to. In turn, living around there becomes more attractive and I’d say house prices will end up reflecting that in Massey, Riverhead, Kumeu. Maybe even Helensville!

Swanson

A recent plan change has allowed a 22ha kiwifruit orchard to make way for 300-odd houses. Google Maps clearly shows  a triangular block of land between O’Neill’s Rd and Christian Rd where you’ll see the orchard bordering the railway line. More houses, a railway link to the city, Piha over the hill and a golf course nearby. Sounds like a recipe for some capital gain there too.

What I’m saying is that if you take note of where new transport links go and learn about nearby zoning changes you’ve got the makings of a better than average opportunity for capital gain. It’s never guaranteed but it’s happened before in other parts of the city, in part for the reasons I’ve outlined above. Think Te Irirangi Dr and Flat Bush or Botany Rd and Dannemora. And it’ll happen again. In fact the Unitary Plan for Auckland will make sure of that even if the plan gets watered down a lot.

First home buyers – keep your eyes peeled for places like this and don’t discount buying there ‘because it’s too far out’.

In the Auckland area home buyers continue to find the going tough in the search for a house. It’s been that way for a while, of course.

They tell stories of how they keep bumping into the same people at open homes and auctions where hopeful couples exchange knowing glances at each other as they get outbid, again.

How houses they like the look of end up selling above their expectations and above their budgets.

They’re keen to find a home but in a market where listings are short and getting shorter they’re beginning to wonder “will I ever buy?”

Tony Alexander’s report yesterday shows anecdotal evidence that the number of people through open homes has fallen. Not a big surprise there as it tends to happen at this time of year when winter edges closer and the weather means less people are going through open homes. This time of year also signals the usual seasonal fall in listings you get too. We’re on the cusp of that right now.

Low listings generally and going lower as winter approaches combined with no real change in demand is a recipe for prices to continue to climb. By the time Spring comes around the average price is likely to be higher again and I can’t see the listing volume changing too much. Home Buyer fatigue could easily set in under these conditions.

A similar kind of price change happened in the 2000’s when I was buying my first house and by the time we got to open home number 40 we were sick of it too. Back then the price change was driven by increasing demand on the back of low interest rates and a debt fueled housing bubble. We’ve actually got more favourable interest rate conditions now but it’s lack of supply which is to blame this time around.

That means it’s going to be very hard to put the brakes on house prices. In fact I reckon you could put interest rates up by a whole percentage point and nothing much would happen to house prices. Sure demand might fall off a bit but not so much that prices will flatten off. It’s all a bit disheartening for home buyers but as someone who’s been there before I’d say the frustration you’re feeling is just par for the course.

My advice to first home buyers? Stick with it – especially through winter. Make the effort to do the open homes in the cold and the rain because your competition will still be in bed suffering the effects of fatigue while you’re out there doing the work.