economy

Auckland homeowners are facing a growing list of factors that can diminish property values, extending beyond traditional concerns like market fluctuations. From unkempt neighbouring properties to the disruption of nearby construction and even the presence of power lines, a range of external elements can impact a home’s worth, according to property experts.

Property economist Ed McKnight, of Opes Partners, highlighted the significant impact of neighbouring properties. “If your neighbour’s property looks like a mess – overgrown lawns, rubbish piling up, cars on the front lawn – that could make it harder to get a premium price for your property,” he said. “Buyers tend to pay premium prices for the dream home. If next door makes it seem more like a nightmare, then the price premium will fall.”

This concern is particularly acute in Auckland, where a surge in townhouse construction is altering the landscape. McKnight recounted a recent case in Ōrākei, where a homeowner attempting to sell found their prospects hampered by a neighbour demolishing their house to build a five-storey apartment building. “It was hard to get someone to pay a premium price for a property when there’s going to be noise and disturbance next door for the following three years,” he explained. The issue, he stressed, is largely beyond a homeowner’s control.

The impact of modern construction isn’t limited to noise, and disruption. Cotality chief property economist Kelvin Davidson noted that increased density, such as the addition of townhouses, can reduce privacy and sunlight, factors valued by many homeowners. Though, he acknowledged the government’s push for intensification and infill housing as a driving force behind these changes.

Vanessa Williams, a spokesperson for Realestate.co.nz, suggested that in areas saturated with new townhouses, properties with gardens and garages may actually increase in value due to their relative rarity.

Beyond neighbourhood issues, environmental factors are as well gaining prominence. Recent weather events have underscored the risks associated with flooding, with approximately 20% of Auckland buildings located in flood-prone areas. Williams emphasized the importance of buyers researching flood zones before purchasing a property, as the risk can negatively impact value, and some owners may be unaware of the potential danger until they attempt to sell.

Infrastructure can also play a role. McKnight previously stated that properties within 250 metres of power lines could be worth up to 20% less than comparable properties further away, although the impact diminishes with distance. He also noted that power lines blocking a view could reduce a property’s price by as much as 27%. However, simpler monopole towers and lamppost cell towers appeared to have no discernible impact on property values.

Aircraft noise is another potential concern, though its impact appears to be variable. Davidson pointed out that properties along flight paths could face challenges. However, a 2018 report by Airways and Auckland Airport indicated that a new flight path over parts of Auckland did not impact property prices, and an earlier study in Brisbane found only a minimal effect from aircraft noise.

Other factors, such as proximity to correctional facilities, can also create a stigma, though the impact appears to be localized. A UK survey found that 36% of people would live near a prison, but half would expect a discount of almost a third on the price. Properties near Auckland’s Mt Eden Correctional Facility are currently valued similarly to those a few streets away.

Finally, issues with infrastructure like sewage ponds, as recently experienced in Christchurch, can devalue properties, with residents reporting offensive odours and health concerns. However, reports indicate that property values have not yet been impacted in that area.