Te Atatu South Property Market

An economic analysis of the Te Atatu South Property Market


Ed McKnight

Economist, property investor and host of the Property Academy Podcast

Go to any property investment seminar, and they will tell you to invest in properties that have infrastructure being built on the ground around them. Of all the suburbs in the Auckland property market, Te Atatu South has some of the most significant infrastructure investment that has just been completed and is still occurring.

Te Atatu South is an Auckland-city suburb located in the west of the city. The suburb has significant residential development currently occurring in the area. Its close proximity to Central Auckland among other economic indicators, suggest that the suburb may gentrify over time, further increasing housing demand.

Auckland’s Population Is Expected To Grow By 30.75% Between 2018 & 2038

In the last 19 years Auckland added the equivalent of Christchurch to its population. That is expected to happen again over the next 9 years. Over the next 20 years (to 2038) Auckland will welcome an extra 550,000 residents. Every one of these people will need somewhere to live, thus stimulating housing demand.

Auckland Council Has So Much Debt, It Can’t Afford To Build New Infrastructure

Auckland Council has a self imposed debt ceiling of 275% of annual rates. They are currently nearing 270%. This means there is little room for Auckland Council to borrow to fund new infrastructure. This limits green fields developments and constrains supply. The majority of the extra houses for the additional 550,000 people will need to be within the city’s current limits.

It Takes Under 20 Minutes To Drive From Te Atatu South To The Sky Tower – About The Same As Remuera. 

Te Atatu South is in a fantastic location. It is just south of the Western Motorway, and it takes less than 20 minutes to drive into the CBD – about the same time as many wealthier suburbs located on the other side of the city, like Epsom and Remuera. This means that Te Atatu South is in a good position for city-workers to move to as other suburbs become increasingly unaffordable. This should stimulate demand in the area.

Te Atatu South Has Delivered Above Average Capital Returns in The Past

Te Atatu South has had annual capital growth of 7.74% from Jan 2000 to Aug 2018. This is above the 6.67% median capital growth per suburb across all of New Zealand in the same time period. It delivered $614,000 of actual growth to homeowners over that period, $32,886 per year.

Te Atatu South Is Placed to Benefit From Te Atatu Peninsula’s Growth

Over the last 18 years house values in Te Atatu Peninsula, located just north of Te Atatu South, increased at 8.71% a year. This was the highest annual capital growth rate of any suburb in Waitakere, and 9th across all suburbs in the country. Te Atatu South is just the other side of the motorway, but the median house price is $146,900 cheaper. Because of this, we’d expect some of this housing demand to flow through into the suburb.

Te Atatu South Has Average Household Income, Which Suggests That Future Gentrification Is Possible

Of the three area units that make up Te Atatu South, Edmonton had $62,900 median household income (300th out of 427 area units), Wakeling had $76,200 (197th) and McLeod $67,000 (273th). At the time the data was taken (2013) the median Auckland suburb had a median household income of $75,000. Taking into account Te Atatu South’s location, and the growth seen in Te Atatu Peninsula, this suggests that there is room for the suburb to gentrify.

My Key Takeaway and Recommendation

Auckland is still the place to invest for long term capital growth. Housing supply in the city is constrained, and housing demand is set to increase. Te Atatu South is still affordable for investors, and is ideally placed for gentrification.

Other Suburbs to Pay Attention to

If you're considering other suburbs in the Auckland property market, you might also want to look into the Mt Wellington property market and the Mangere property market.


Ed McKnight

Ed McKnight is the host of the Property Academy Podcast – NZ's #1 business podcast. He is an economist, having studied at the University of Auckland and the University of Waikato. He's a frequent writer for Informed Investor Magazine and has contributed to NewsHub, Stuff, OneRoof and Property Investor Magazine.