They say cold hard statistics do not lie. Please study the table
below. It will give you some very interesting insight.
Location Average House Price May 2007 Price May 2004
Auckland North - Albany $640,000 $477,000
Auckland North - Birkenhead $552,250 $377,000
Auckland Central - Eastern Suburbs $761,500 $628,000
Auckland Central City $427,250 $350,000
Auckland Central - Mt Eden / Epsom $690,000 $502,000
Auckland West - Henderson Area $383,750 $274,000
Auckland South - Papatoetoe $334,500 $252,000
According to this data during the past 3 years the price increases where as follows:
Birkenhead - 46.4%
Henderson - 40.1%
Mt Eden/Epsom - 37.5%
Albany - 34.2%
Papatoetoe - 33%
Auckland City - 22%
Eastern Suburb -21.2%
What does this tell us? Categorizing properties into high capital growth areas and high cash flow areas can be some kind of a myth. You can get high capital gains in areas that are traditionally regarded as high cash flow areas. Just because your quantum of return is high does not necessarily mean that you have made a good return on your investment. The capital gain has to be studied in relationship to the purchase price. Birkenhead, Henderson and Papatoetoe definitely do not command the same respect as Mt Eden, Eastern Suburbs or Albany. But then statistics do not lie.
COLIN KUMAR
Barfoot & Thompson Commercial
m. 64 27 684 1114 | p. 649 358 0989
c.kumar@barfoot.co.nz
I use an e-mail subscription service to avoid spam problems and keep in contact with my clients.Timely information is the key to succeed in real estate. Incase you have not subscribed to my news letter please send me an email and I will send you the subscription link. Alternately, you can send
me a blank e-mail on the following address:
barfootandthompson@getresponse.com
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2 comments:
Thanks Colin,
I do appreciate receiving your emails.I am not in the market for residential in Auckland yet ( I am currently looking at buying another residence in Dunedin) however I find your emails very informative and when Im ready for my commercial purchase I will contact you again
Regards Lance
Colin,
Thanks for the email. Very intrigued to see you have captained submarines! Wow.
Firstly, the title of your blog would seem to be in conflict with the old addage: "There's lies, damned lies and then there's statistics".
I reckon you can make statistics show nearly anything you want. Having said that, I'm sure the ones you show are correct.
Also, I noted in your last column a quote from Robert G Allen. I have read his book "Nothing Down". He is/was of course a complete conman and failure. He was declared bankrupt. If he did ever make any money it was through selling books and over priced seminars, not by buying real estate with no money down.
John T Reed has a good article on him: http://www.johntreed.com/Reedgururating.html#anchor496881
David Blake
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