Auckland leads slowdown, as national prices dip again
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06/06/2024. 07:47
KoreaPost
Home value growth in Aotearoa New Zealand has completely petered out in the past two months, with values dipping by 0.2% in May, after a minor 0.1% fall in April.
CoreLogic's House Price Index now shows an average property value across NZ of $931,438, up by 1.0% from a year ago, but still roughly 11% below the peak.
Below the recent stagnation at the national level, the main centres are showing multi-speed conditions. Auckland dropped a notable 0.8% in May (after a 0.6% fall in April), while Wellington saw a 0.6% fall, and Tauranga dipped 0.5%. By contrast, Christchurch rose 0.5%, and Hamilton and Dunedin both saw gains of 0.8% over the month.
CoreLogic NZ Chief Property Economist, Kelvin Davidson, noted that although the national declines over April and May have been very small, the shift in the market is clear to see.
"In the past few weeks we've seen a raft of regulatory changes, including the abrupt scrapping of first home grants, the near-term easing of the LVR rules and the introduction of debt-to-income caps. But with mortgage rates tipped to remain high for a while yet, it's no surprise the market has lost a bit of the momentum we had been seeing through the early part of this year. Forthcoming tax relief for households is unlikely to change that," Mr Davidson said.
"An important factor still in play is the high stock of listings on the market, and the associated shift in bargaining power towards buyers, which is subduing prices. We also estimate that the shortening of the Brightline Test from 1st July could see as many as 50,000 or so properties benefit to some degree from reduced risk of having to pay capital gains tax, which could see some more listings coming to market. Of course, only a portion of those properties will actually be put up for sale.
"On another note, borrowers who have faced higher interest rates as their previous mortgage deals come to an end have coped pretty well with tight monetary policy thus far, thanks largely to the strong labour market. Looking ahead, a little less job security could see housing activity and prices remain fairly subdued," he added.
CoreLogic House Price Index - National and Main Centres
Change in property values | Average Value | |||||
Month | Quarter | Annual | From peak | |||
New Zealand | -0.2% | 0.1% | 1.0% | -10.7% | $931,438 | |
Auckland | -0.8% | -1.0% | -1.9% | -15.8% | $1,279,454 | |
Hamilton | 0.8% | 1.0% | 1.5% | -10.1% | $817,041 | |
Tauranga | -0.5% | -0.8% | 0.8% | -13.0% | $1,031,394 | |
Wellington | -0.6% | 0.6% | 2.8% | -19.1% | $920,551 | |
Christchurch | 0.5% | 0.9% | 4.8% | -2.3% | $765,336 | |
Dunedin | 0.8% | 2.1% | 4.8% | -9.1% | $650,016 | |
CoreLogic House Price Index Main Centre Average Value
CoreLogic House Price Index Auckland
Change in property values | Average Value | ||||
Month | Quarter | Annual | From peak | ||
Rodney | -0.7% | 1.5% | 2.2% | -10.6% | $1,269,599 |
North Shore | -1.2% | -0.8% | 1.6% | -13.0% | $1,458,462 |
Waitakere | 0.0% | -0.6% | -0.6% | -18.0% | $1,005,693 |
Auckland City | -0.7% | -0.8% | -5.3% | -16.5% | $1,474,341 |
Manukau | -1.4% | -2.6% | 0.9% | -16.7% | $1,145,486 |
Papakura | -0.8% | -2.4% | 2.6% | -16.3% | $907,951 |
Franklin | -0.4% | -1.3% | -5.4% | -14.3% | $904,088 |
Auckland has been at the forefront of the recent slowdown in property values across the country, and Waitakere was the only sub-market to avoid falls in May. The remaining markets saw declines ranging from 0.4% in Franklin to more than 1% in both North Shore and Manukau.
Over the three months to May, only Rodney saw growth in property values (1.5%), with the rest of Auckland down by at least 0.6%, and as much as 2.6%.
There's always been a perception that Auckland leads the rest of the country in terms of property market performance, and although the evidence shows that isn't always the case, it's certainly still pretty striking that our largest city is now seeing renewed weakness in prices," Mr Davidson said.
"With listings up, buyers now have the bargaining power, and it'll be interesting to see if this pattern spills over more significantly into other markets in the next few months."
CoreLogic House Price Index Wellington
Change in property values | Average Value | ||||
Month | Quarter | Annual | From peak | ||
Kāpiti Coast | 1.8% | 3.5% | 4.7% | -15.1% | $844,386 |
Porirua | -0.2% | -0.4% | 4.7% | -17.2% | $837,999 |
Upper Hutt | -0.9% | 2.8% | 7.6% | -19.4% | $773,078 |
Lower Hutt | 0.2% | -0.3% | 2.5% | -20.5% | $797,297 |
Wellington City | -1.0% | 0.8% | |||