With all the headline space Auckland takes up in the property pages, you'd be forgiven for thinking there were even any houses left outside the City of Sails. But as our mortgage adviser and self-described 'property agnostic' Paul Davey points out, it's that Auckland activity which is seeing the rest of the north island's real estate surge. Here are his insights into what's going on outside Auckland at the moment.
"In the last 12 months, Auckland has just gotten too expensive for a lot of people," Paul says. "So, people are investing elsewhere."
According to him, the new locations where people are picking up real estate lie a little further south, in the Bay of Plenty and Waikato. He says this has been evident in the price hikes across Tauranga and Hamilton in the last year or so.
"Property prices in Hamilton have risen but still sit around $450,000, and it's about the same in Tauranga - in terms of medians, they're at about 60 per cent of what you pay in Auckland."
And while being priced out of Auckland might seem like a bad thing for many people, Paul notes that these cities provide a great alternative for people building wealth or investing.
"It's always good to diversify, you can't have all your eggs in one basket. Yields in Auckland are low and capital growth is slowing down, but prices aren't correcting to any great extent. So, people are looking at [Hamilton and Tauranga] as viable alternatives."
This includes many Auckland-based first home buyers, who have healthy income and are making their first purchase an investment property while still renting in the big city. On top of this, people approaching retirement age have found considerable equity in their Auckland property, and are selling at high profits to settle down in these areas with plenty of money to spare.
But where does that leave people already living in these parts of the country?
"First home buyers in Tauranga and Hamilton are typically on lower incomes than professional couples living in Auckland," Paul says. "So as investors move down there and prices rise, locals are often getting priced out of their home market."
"This means they start looking at areas even further out, like Te Puke, Rotorua, Matamata and even Taupo."
For now, Paul says the ideal step would be for an extra 50,000 houses to be made available. Unfortunately the costs of making this happen are prohibitive. For now, it seems like price growth in Auckland is going to continue rippling out into the rest of the north island. This ripple effect doesn't look set to stop any time soon, either. Paul notes that the factors driving up house prices (migration, low interest rates and a lack of building supply) do not have quick solutions, which is going to mean the market remains difficult for many.
"Until we come up with strong leadership around freeing up available land and building more affordable houses, then a lot of people are going to struggle to realise their dream of home ownership."