Auckland house prices slump while heat still on in smaller centres

Tuesday, 2 July 2019

How much have values moved over the past quarter?

Weakness in Auckland house prices weighed heavily on the rate of property value growth across New Zealand in June, new data shows.

QV's latest market update shows the nationwide rate of residential property value growth slowed to 2 per cent last month, from 3.5 per cent a year earlier.

But that was heavily influenced by a drop in Auckland, where prices were down 2.7 per cent year-on-year. Prices in the central suburbs were down 3.3 per cent, Manukau down 1.5 per cent, and Rodney down 1.3 per cent. Values in other parts of Auckland increased slightly.

Hamilton's growth rate slowed to 4.7 per cent, while Wellington's prices lifted 7.9 per cent, and Dunedin's 12.2 per cent. Christchurch values were up only slightly year-on-year.

* Central Auckland house prices fall fastest: QV

* Falling house prices spread across more of New Zealand**

Central Auckland house prices are experiencing the most weakness.

QV general manager David Nagel said there was a lack of impetus in the market.

'Demand remains steady and listings relatively low, resulting in stable market conditions but subdued value growth. We anticipate this will continue over the coming months, with supply remaining fairly constrained and demand either staying flat or dropping slightly in many areas.'

Auckland property prices are continuing to fall.

He said affordability was a major constraint and location was becoming increasingly relevant. Townhouses were selling well, particularly in Wellington.

'It's the outskirts of city centres that continue to see plenty of activity, particularly from first-home buyers,' he said.

'The wider Wellington region is a great example of this with areas like the Hutt Valley continuing to attract young families and professionals looking to take their first step on the property ladder. In fact, according to recent Corelogic Buyer Classification data, over half of all buyers in some outer city Wellington suburbs are first-home buyers. This section of the market continues to benefit from the low interest rate environment as well as less competition during the quieter winter period.'

House values were up 15 per cent year-on-year in Upper Hutt in June.

There, senior consultant David Cornford said first-home buyers, helped by low interest rates, were driving the market.

Outside the main centres, Horowhenua had the fastest growth, up 11.1 per cent in the past three months. It was followed by Kawerau, at 10 oer cent, and Manawatu at 9.6 per cent.

Waimate had the fastest quarterly growth in the South Island, up 10.8 per cent in three months.

Nagel said QV was watching the effect of new insulation requirements, and impending Healthy Homes rules, on the market.

'At this stage, we have observed no major impact on the investment market although we may well see some upward pressure on rents, as landlords face up to the increased costs of keeping their properties insulated to the required standards.'