Auckland house price growth has stalled – CoreLogic

Thursday, 6 June 2024

The average national house price was $931,438 in May, CoreLogic’s latest figures show.

Auckland house price growth has ground to a halt, and it could be a sign the broader market recovery is set to slow further, a property researcher says.

CoreLogic’s latest House Price Index is out, and it shows the average national house price fell 0.2% to $931,438 in May.

That followed a 0.1% monthly dip in April, and it meant the national average was up 1.0% annually, but was 10.7% below the March 2022 market peak.

But in the country’s biggest market, Auckland, prices fell by 0.8% to a regional average of $1.27 million in May.

The region’s price trajectory was on a downward trend, with prices down by 0.6% in April, by 1.0% over the three months to May, and by 1.9% annually.

Within the region, Waitakere was the only sub-market to avoid price falls in May, as its prices remained flat, the figures showed.

Prices were down in all the other sub-markets, with North Shore and Manukau recording the biggest falls of 1.2% and 1.4% to averages of $1.45m and $1.14m respectively.

Auckland was at the forefront of the national slowdown in prices in May.

Rodney recorded price growth of 1.5% over the three months to May, but in the other markets quarterly price was down by at least 0.6% (Waitakere) and as much as 2.6% (Papakura).

CoreLogic chief property economist Kelvin Davidson said there was a perception that Auckland led the rest of the country in terms of property market performance.

The evidence showed that was not always the case, but it was striking that the largest city in the country was now seeing renewed weakness in prices, he 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.'

Auckland was at the forefront of the slowdown in prices on a national level, but underlying that the performances of the other main centres were mixed.

Prices in the Wellington region were down 0.6% to a regional average of $920,551, while in Tauranga they dipped 0.5% to $1.03m.

In contrast, prices in Christchurch rose 0.5% to $765,336, and in Hamilton and Dunedin they were up 0.8% to $817,041 and $650,016 respectively.

CoreLogic’s Kelvin Davidson says house sales and prices are likely to remain fairly subdued this year.

Regional centres also returned patchy results, with prices in Whanganui, Rotorua, and Queenstown up by at least 1% in May, but prices down in other areas, notably Nelson with a decline of 1.0%.

Davidson said with mortgage rates tipped to remain high for a while yet, it was no surprise the market had lost a bit of the momentum seen through the early part of this year.

Affordability remained stretched and forthcoming tax relief for households was unlikely to change that, he said.

'The removal of first home grants is unlikely to have a significant impact on new buyer demand, and the caps on debt-to-income ratios won't bite straight away either.”

But looking ahead less job security could see house sales and prices remain fairly subdued, he 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 price.

'Our expectation that 2024 will only see the market ticking along remains firmly on track, with activity and prices set to remain variable from month-to-month and across regions.”

Barfoot and Thompson’s Peter Thompson says sales in May were nearly a third higher than they were in April.

Meanwhile, the latest figures from Barfoot & Thompson, Auckland’s largest real estate agency, also showed the region’s prices were not on the rise in May.

The figures had the agency’s average sale price down 2.5% from April to $1.18m, although its median sale price inched up 0.4% to $1.01m.

But the figures revealed a pick-up in market activity last month, with sales up 30% from April and 14.6% on the average of the previous three months.

Barfoot & Thompson managing director Peter Thompson said the market experienced a late autumn boost in the form of buyers being prepared to meet prevailing prices.

“We sold 916 homes in the month, and it’s the highest number of homes we have sold in the month of May for three years. It is nearly a third higher than the number of homes we sold in April.”

Sellers had trimmed their price expectations in recent months as the summer season drew to a close, and buyers had responded positively, he said.

“It is another sign that the housing market is finding stability around current price levels.”

The agency had 1695 new listings in May, and had total listings of 5763 at month's end, he said.

“So buyers continue to have the greatest choice in more than a decade. Currently, for every home being sold, there are another six on the market.”